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Interesting question! However, as I belatedly found out, it turns out it was solved in 1940 by Tutte and others, and the reference is in the Wikipedia article on rectangles :-) The answer is that you can tile a rectangle with finitely many squares iff the sides of the rectangle are commensurable, i.e., rational multiples of the same number. The paper is http://dx.doi.org/10.1215%2FS0012-7094-40-00718-9 - which looks, shall we say, non-trivial. I think it's obvious that if you're allowed infinitely many squares, then it is always possible: the greedy procedure in which you put in/cut off a square whose side is the smallest side of the remaining rectangle,and then repeat, converges by completeness of the reals, surely...
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