I find that the secret to keeping squalor down is actually counter-intuitive:
a slow campaign and very high taxes!!
Although the blitz can make this not an issue, it's more of a cover than a solution. Most squalor is caused by allowing populations to grow too big too fast.
Cities conquered by a large army will seldom revolt, and it only takes a few turns of that occupation to put them well into the green, but if you skip those 4-5 turns, woe be to you, mon frère!!
I have never seen a city with a governor and five or more cards of soldiers revolt, except in Greece, where cities are so huge that proper management is difficult. When faced with such revolt, crucifying the population is a startlingly effective method, but most of us like to play the good guys so i keep it as a last resort.
building is a good way to reduce initial unrest. early in the game, building roads, ports, and traders at every new town is cheap, fast, and effective.
One last thing - blue or yellow faces are nothing to be worried about. Sometimes you can't please everyone, especially factions starting with a weak and far-flug empire (Numidia, Scythia). Even the occasional riot is nothing in the long term, so long as it is soon corrected.
I play exclusively on vh/vh and have never tried the other difficulties, so while this advice holds true for those campaigns i do not know what differences may be in the others.
[This message has been edited by SrJamesTyrrel (edited 06-20-2008 @ 10:43 AM).]