My grandma had the same problem. First thing she did was use a plastic hanging pot to put seed in and put a paper plate over the top of the pot so the birds could get at the seed from the sides but the squirrels couldn't get at it from the top (which was the roof since she hung it from the eaves of the house...) It sort of worked until the squirrels just started to dump the seed out by tipping the whole thing. THEN she got one of those dried corn cob holders and that worked like a charm! The squirrels liked the corn much better than the birdseed so they ate the corn and left the seed for the birds. Plus, it was fun to watch because the holder was actually a see saw and the squirrels would get on there and balance while they nibbled the corn. Anyway, the point is if you put out something the squirrels like better than the seed they will leave the seed for the birds.
Heres a link to a similar one, although the one Gram had was bigger. It held 2 corn cobs and actually stood on the ground...http://www.backyardgardener.com/gp/Gardening_Products/Garden_Buddies/Squirrels/Squirrel_Feeders/See-Saw_Squirrel_Fee.html