Though Heavenly may theoretically have more vertical drop, Squaw Valley, better known as Squaw, is the definitive Tahoe alpine resort. Over 35 lifts, many of which are high speed, service 6 mountains with 4000+ skiiable acres. However, I'd like to specify that a good percentage of that acreage is not for anyone but a true expert. Squaw is generally acknowledged to have the most challenging slopes. This is great for the hot-shots, but intermediate and beginner skiers may do better at Alpine Meadows, Sugarbowl or Northstar (which many locals dismiss as "Snorestar"). Certainly, the Mountain Run at 3:30 pm (the only way to ski down from the beginner area) is a traffic nightmare with experts from KT22 zipping between terrified snowplowers.
Squaw's $56 lift ticket is pricey, but multi-day passes provide some relief. However, don't expect the mid-week specials of the smaller resorts. Also, if the weather is storming you may wish to check the ski reports in the morning, before you motor over to Squaw. Squaw (and Alpine) have very exposed peaks and often close the upper mountain lifts for wind-hold. On such days, you will still pay the full price for the privilege of skiing the runs serviced by Red Dog and Squaw Creek over and over.
Squaw has 4 major service areas: High Camp and Gold Coast on the mountain, and Olympic Village and Squaw Creek Resort at the base. When you are tired of skiing, there are plenty of shops, eateries and bars all vieing for what money remains in your wallet. I like the outdoor grill at the base of Squaw Creek Resort: Burgers and fries will run you at least 8 bucks, but they are well worth it, especially on a sunny day when you can get a bistro table outside with a view of the mountain. Check out the shops and hotel, too. There's something decadent about clomping in your ski boots around the plush carpet of the lobby, leaving clumps of snow in your wake.
Squaw hosted the 1960 Winter Olympics, and they will never let anyone forget it. Sure, there is a lot of hype, and other resorts may be more low key, cost-effective and friendly. But you should come at least once and see what some of the hype is about.