Stef,

Avi and Benjamin already gave some good explanations, so I will just add 
some less obvious details. Note that there is a self-interest list at 
YahooGroups, though I don't think the folks here will mind an 
occasional non-Squeak question.

The model that is presented to the programmer (the actual implementation 
is quite different, but totally hidden) is that a method object is 
cloned to create the corresponding context object. When this cloning 
takes place, the method's "self*" slot is set to the receiver of the 
message. The "*" indicates that this is a parent slot, so a message 
sent to the context object and not found there will be looked up in the 
receiver.

So the implicit self is more like "thisContext" in Smalltalk than like 
"self".

Note that block and blockContexts can be exactly like methods and 
contexts except that they have a "lexicalParent*" slots instead of a 
"self*" one. So "self" still refers to the receiver of the outermost 
lexical context, as it should.

Here is what the lookup of the unary message "set" looks like with an 
implicity self receiver inside a nested block:

  thisContext has no 'set' slot=>look in lexicalParent*
  blockContext has no 'set' slot=>look in lexicalParent*
  context has no 'set' slot=>look in self*
  a circleMorph has no 'set' slot=>look in parent*
  traits circleMorph has no 'set' slot=>look in parent*
  traits morph has no 'set' slot=>look in parent*
  traits clonable has no 'set' slot=>look in parent*, cloning*, 
comparing*, ordering*
  lobby has no 'set' slot=>look in globals*, defaultBehavior*
  globals has a 'set' slot, so we return that

I didn't follow the branches in the cloning*, comparing*, ordering* or 
defaultBehavior* slots to make things shorter, but in a real lookup all 
parents are searched.

At each step in the lookup, a 'set' slot would correspond to the 
Smalltalk temp/arg, temp/arg, temp/arg, instance variable, class 
variable, class variable, class variable, pool, global and global 
respectively.

So the whole issue, here, is to present a single concept to the 
programmer that can be used in several different situations.

It is interesting that Brian has eliminated the "self*" slot in Slate, 
so that the above lookup would not find the instance and class 
variables. Instead, you have to explicitly send a message to one of the 
arguments (the first one is named, and not "self" though I think you 
can call it that for old time's sake). In Neo Smalltalk I went one step 
further and eliminated the globals.

-- Jecel