Yes, the leucistic/albino discussion has been here for a while. I have been asking prominent birders (or rather; scientists), incl. writers of European, Australian & South American field guides. Among people asked were also leading figures of the Natural History Museum in Copenhagen, Denmark. They agreed with what I learnt in Uni:
Albino: A complete lack of pigment (incl. soft parts & eyes).
Leucistic: A partial lack of pigment. The bird (or whatever) isn't completely white but rather white with some patches still retaining at least some pigmentation. Complete leucistic individuals lack all pigments, except on their soft parts (eyes, legs in birds, bill/nose-tip etc.).
In reality there is no real use of "partial" next to "albino". A partial albino isn't an albino but rather a leucistic individual!
Here's a quote from page 733 in the "Birds of Africa south of Sahara" by Ian Sinclair & Peter Ryan:
"Leucistic: Unusually pale individuals, resulting from the absence of pigments. The extent of leucism can be either partial or complete. Most "albinos" are usually leucistic birds that retain some pigmentation at least in their soft parts"
So, back to the squirrel. Yes, it certainly is lacking pigment, so it is leucistic. To be more precise it is a partial leucistic individual. Breeders of various animals may call it something else, but strictly speaking, it is leucistic. Genes for lack of pigmentation are usually (exceptions are known) recessive, meaning that unless both parent have it (and pass it on), the next generation won't be lacking the pigment - even though it can be a carrier for the gene. Usually, such pale individuals don't survive for a long time in the nature, so it is relatively rare; especially complete albinism. In any case, it is interesting when you see it...