In chapter 7 of Animal Farm, how do the animals react to Squealer's lies about Snowball?

In chapter 7 of Animal Farm, Squealer, Napoleon's propagandist-in-chief, attempts to convince the animals that the exiled Snowball was a traitor, working in cahoots with the hated human oppressor to overthrow Animalism and restore Mr. Jones to power. It's all lies, of course; Snowball was one of the heroes of the Animalist revolution, playing a lead role in the epic Battle of the Cowshed. But Napoleon has always been insanely jealous of Snowball, not least because he himself was notably absent when the battle was raging.
Since banishing Snowball from the farm, Napoleon, with the able assistance of Squealer, has systematically set about rewriting history, trashing Snowball's reputation and making Napoleon out to be the real hero of the revolution. The other animals are quite stunned to hear that Snowball was really a traitor all along. They vividly remember the important role he played in driving Mr. Jones from the farm; he even received a medal for his actions. What Squealer's saying about him just doesn't make any sense.
But eventually, the animals come around to Squealer's way of thinking. He's so skillful at describing Napoleon's (entirely fictional) heroism at the Battle of the Cowshed that they convince themselves that it really did happen. Animal Farm is a political allegory about the Soviet Union under Stalin, and this episode shows that the animals' susceptibility to lies and propaganda closely resembles that of Soviet workers.