I bought an original Xbox a few years ago, I've used that pad for must be hundreds of hours, both on the Xbox and on the PC, and it has never squeaked!I would take it back DD, ive had about 6 and had none squeak from new.
I specifically wanted a wired one, it wasn't just because it was cheaper. 
Sounds like N64 syndrome.![]()
Are you sure its not the mouse?