OOP: Difference between squibs and muggles? (sort-of spoilers)

[zenchela]

No: HPFGUIDX 64304

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If a child with magical powers is born to a wizarding family OR a 
hitherto non-magical family, the child is a witch or a wizard (Harry, 
Hermione.  Wouldn't you love to chat with Dr. and Dr. Granger?)

If a child with no magical powers is born to a hitherto non-magical 
family, the child is a muggle (Dudley -- as far as we know.  
Petunia's case is open to all kinds of questions.)

If a child with no magical powers is born to a wizarding family, the 
child is a squib (Arabella Figg, Argus Filch).  Neville was feared to 
be a squib, but eventually proves himself a wizard.  (Why that took 
so long is a subject for another thread.)  And we have it from JKR 
that someone who's never done so before will use magic in the 
future.  

When does a squib stop being called a squib and become a muggle?  Or 
are they ever?  

Zen