This entry for NewScientist proves that squirrels don't smell nuts. A squirrel's memory is phenomenal. If you try this experiment at home it is important to distinguish between different squirrels. In this experiment there were three of them. All three squirrels exhibited the same memory traits: They always returned to the same position. Collectively they made over 300 separate trips and seemed to work as a team to systematically clear the hoard of nuts. Here is a link to NewScientist's Channel on Youtube, I highly recommend their channel:
I would love to be able to delve deeper into animal science at dawn/dusk but my camcorder is limited to bright sunny days, I don't expect to win the competition so I'll keep saving for a better quality video camera.
Burrying nuts, never more than one or two per cache, leaves the squirrel with food stashed in thousands of different sites. The squirrel therefore ensures it will not loose everything in a single theft, but it must pay the price by having to remember where all those nuts were cached.