Video Addendum added 1/11/14
There is absolutely no one size fits all squat position. If you don't believe me, you are in for a treat. This article will help show you why athlete comfort should dictate squat width, why some people's (not EVERYONE) feet point out (no matter how much "mobility" work they do), why some people have a really hard time squatting deep, and why some people are amazing at pistols while others can't do them at all.
The hip joint is basically made up of a "socket" on the pelvis (called the acetabulum) and a "ball" at the top of your thigh bone (femur), which we call the femoral head. Around the hip joint are a lot of muscles, a joint capsule, and connective tissue. There are many other anatomical considerations when considering a squat, but let's focus on the hip.
When someone has difficulty squatting, or their feet turn out, or they like a wide stance, we all want to jump on the bandwagon and say "your hips are tight, you need to mobilize them". If we say that without considering anatomical variations of the hip joint, we can be misled.
Let's take a look at this first picture. Here we have two femurs from two different people. One points more upwards, the other points more downwards. Do you think these people will squat the same when they have that much bony difference?
If you aren't convinced yet, take picture 2. Clearly one of the "balls" in the ball and socket joint is extended longer off the femur than the other. This will absolutely change the mechanics of squatting between these two people. No amount of soft tissue treatment will change that.
Now look at picture number 3. Look at how different the angle is that the ball is pointing between these two femurs. Guess what? One of these people will have a bony block when they try to squat narrow while the other can squat narrow like a champ. Alternatively, one will squat wide and the other will have pain with wide squatting. But doesn't the difference in the shape of the "ball" make that seem obvious? Maybe your piriformis isn't the limitation after all.
Things get even more interesting when you start looking at the socket. Take a look at picture number 4. On the left, you can see into the socket. This person will likely be able to squat with a narrow stance vs. the person on the right who literally run into themselves when squatting with a narrow stance.
Now look at picture 5. Again we see the difference in how much of the hip socket we can see. There is no way these two people will squat the same. The bony anatomy literally won't let them.
Picture 6 is a view looking at the hip socket from the side. One is pointing straight out, the other is pointing down and in the front. My guess is one of these people will be better at pistols and one will be worse.
Athlete's won't squat the same, and they SHOULDN'T! I hope I shed some light on the WHY. Athlete comfort will dictate the stance that puts their hip in a better bony position. There are narrow squatters and there are wide squatters. That may have nothing to do with tight muscles or "tight" joint capsules and have more to do with bony hip anatomy.
Very few people are at the end range of their hip motion, so hip mobility drills are definitely a good idea.
People will express their hip mobility in different planes, and that is not a bad thing.
All photos were used with permission from http://www.paulgrilley.com/bone-photo-gallery