Here's the problem (from little Spivak):
Define $f:\mathbb{R}\rightarrow\mathbb{R}$ by
$$f(x)=\begin{cases} e^{-x^{-2}} & x\ne 0 \\ 0 & x=0 \end{cases}$$
Show that $f$ is a $C^\infty$ function, and $f^{(i)}(0)=0$ for all $i$.
Anyhow, here's my proof. It gets pretty ugly at the end and I do a little handwaving (every term is of the form ... pretty much "because I say so", and the last step should be a better form of induction instead of "successive applications of the rule..." but the exact way to say it correctly escapes me.
For arbitrary $p,q:\mathbb{R}\rightarrow\mathbb{R}$,
$$(e^{q(x)}p(x))'=e^{q(x)} q'(x)p(x) + e^{q(x)} p'(x)=e^{q(x)}(q'(x)p(x)+p'(x))$$
Let $q(x)=-x^{-2}$, $p_0(x)=1$, and $p_{n+1}(x)=q'(x)p_{n}(x)+p_n'(x)=\frac{2}{x^3} p_n(x) + p_n'(x)$. Every term of $p_n(x)$ is therefore of the form $a x^{-n}$ for some $a,n\in\mathbb{R}$ and $n>0$.
Then $f^{(n)}(x)=e^{q(x)} p_n(x)=e^{-x^{-2}}p_n(x)$
By the definition of derivative,
\begin{align*} f^{(n+1)}(0) &= \lim_{h\rightarrow 0}\frac{f^{(n)}(h)}{h}\ &= \lim_{h\rightarrow 0}\frac{e^{-x^{-2}} p_n(h)}{h}\ &= \lim_{h\rightarrow 0}\frac{h^{-1} p_n(h)}{e^{h^{-2}}}\ \end{align*}
Since every term of $p_n(h)$ is of the form $a h^{-m}$ for some $a,m\in\mathbb{R},n>0$, it follows that every term of $h^{-1} p_n(h)$ is also of the same form. Thus if we can show that $\lim_{h\rightarrow 0}\frac{ah^{-m}}{e^{h^{-2}}}=0$, the result follows.
Applying L'Hopital's rule results in
$$\lim_{h\rightarrow 0}\frac{-m h^{-m-1}}{e^{h^{-2}} (-\frac{2}{h^3})}=\lim_{h\rightarrow 0}\frac{2m h^{-m+2}}{e^{h^{-2}}}$$
Successive applications of L'Hopital's rule result in multiplying numerator by some constant and increasing the exponent of $h$ by 2. Thus apply the rule $m/2+1$ times will give a positive exponent, and the limit will be clearly 0.