wget "http://wifipineapple.com/index.php?downloads&downloadUpgrade=2.8.0" -O upgrade.bin

binwalk upgrade.bin   

example output:
DECIMAL   	HEX       	DESCRIPTION
-------------------------------------------------------------------------------------------------------
0         	0x0       	Squashfs filesystem, little endian, version 4.0, compression:  size: 5197504 bytes,  1579 inodes, blocksize: 262144 bytes, created: Sun Mar  3 08:24:39 2013 
6291456   	0x600000  	uImage header, header size: 64 bytes, header CRC: 0xD22A6633, created: Sun Mar  3 08:24:44 2013, image size: 913361 bytes, Data Address: 0x80060000, Entry Point: 0x80060000, data CRC: 0x3085D0DC, OS: Linux, CPU: MIPS, image type: OS Kernel Image, compression type: lzma, image name: "MIPS OpenWrt Linux-3.7.9"
6291520   	0x600040  	LZMA compressed data, properties: 0x6D, dictionary size: 8388608 bytes, uncompressed size: 2808940 bytes



we want the first partition in this case, so we will extract it using ‘dd’

dd if=upgrade.bin of=pineapple.img bs=1 count=5197504 #the 5197504 is from the binwalk output.

unsquashfs pineapple.img #creates and extracts to folder ‘squashfs-root’


If you want to put the extracted files into an img file:
du squashfs-root #find out how big the squashfs-root dir is (Just over 20M in this case)
dd bs=512 count=50000 if=/dev/zero of=openwrt.img #creates a empty IMG file that is about 26M

mkdir op
sudo mount -o loop openwrt.img op 
sudo cp -pfr squashfs-root/* op/   #copies with permissions intact
sudo umount op