This brake squeak is not actually the pads. This squeak that everyone is complaining about is coming from the hand brake. However, it is not the actual braking motion of the hand brake. The hand brakes are drum brakes. The cause of this problem is the way the shoes are seated and they actually rub against the side retaining plate (don't know what it's called). To fix this the rotor needs to come off and the shoe needs to be removed and you will see that the retaining plate* has a few contact points with the shoe. These contacts points should be scraped down to the metal, or rusted. File these areas down and grease them up really well. This should fix the squeaking noise.
Here's the link to the guy that found out how to fix it:
http://www.e90post.com/forums/showthread.php?t=697365