Put one of these about halfway up:
– very effective at keeping the squirrels off.
Best to site the whole lot in the middle of the lawn (or open area) if possible – some birds will hunt around for dropped seed under the feeders and you need to give 'em a chance to spot cats.
We've also put out a tray under a mesh cage:
http://www.birdfood.co.uk/product_details.php?area_id=2&group_id=16&nav_id=35&prd_id=1038
– the small mesh version keeps out all but the smallest squirrels and starlings and lets smaller ground-feeding birds in. (I think bluetits tends to prefer suspended seed feeders tho')
We've never had much luck with peanuts – tho' curiously our neighbours do.
We didn't used to have trouble with (urban) pigeons – ie rock doves – till the council put some more netting under a local bridge, then we were inundated with te bloody things – they'd happily sit on the roof all day waiting to see some food appear. Whereas most of the other bigger birds will land, pick up what they want then fly off. Only thing that seems to discourage pigeons – or prevent 'em hogging it – is put food out late night, for early morning, and when approaching dusk, 'cos they seem to be lazy buggers.
We've alway got a couple of collar doves nesting nearby – they're quite entertaining, they get to the point that if there's no food out they'll start wandering round the patio as it to remind us. (And I'm sure we've had several different pairs in the last 4 years).
One thing with the whole seed (tho' I agree it's more of a pain getting it in the lawn) – it does tend to be a fair bit cheaper than the kernels.