A squib results from two pureblood parents (see our
blood status guide if you haven't found it already

). So if you were to have a pureblood child born of two squibs, I don't understand where the muggleborn aspect would come in?
As for how often the occurrence is, I would say it's as rare as a magical child arising from a muggle family. And as there are far less squibs than muggles, statistically it's going to be fairly unusual. That's not to say you shouldn't go down that route if it fits the character, however.
I'm a bit confused as to where their having a squib family or not would affect them attending Durmstrang, though. If at least one family line is either pure or halfblood and they have the money, a magical child would be able to attend.
~ Carys
EDIT: Whoops, Julie beat me to it!