I usually hold my pick like this (with slight variations depending on what needs to be played:
(That's not me btw :P )
I find that the bulge on your thumb at the knuckle can be used to easily pull of a pinch, without having to move your hand clumsily.
I learnt by watching a couple of videos on YouTube. Doesn't matter which ones, they'll all basically tell you the same thing.
Theoretically, you can pull it off at any note, any string.
Practically, however, it depends on many things like the thickness of the string, how a high a note you're holding, and well, how good you are.
Yes, you have to hit the string at particular points. You can find out where exactly by, as yossarian already said, by using your pickups as a reference point.
On a side note, I advise against holding your pick with three fingers. It makes it more difficult to switch between the lower (6th, 5th) strings and the higher ones (1st, 2nd). You would have to displace your hand. If you use only two fingers, as seen in the above link, it's much easier.
I think you should start migrating to two fingers.
The only way to get good at squealies is to understand how exactly to do it, and keep trying. I know it's frustrating in the beginning, you don't know what exactly people are talking about, how to move your finger, you're hurting the side of your thumb, and you just wanna snap your strings but trust me, once you pull it off and get the hang of it and realize you CAN sound like Dimebag... It's gonna be totally worth :)
Keep it metal \m/