The American Heritage Dictionary has this to say:
USAGE NOTE: It is often maintained that each other should be used to denote a reciprocal relation between two entities, with one another reserved for more than two: thus The twins dislike each other but The triplets dislike one another. Sixty-four percent of Usage Panelists say that they follow this rule in their own writing. But it should be pointed out that many reputable writers from Samuel Johnson onward have ignored the rule and that the use of each other for more than two, or of one another for two, cannot be considered incorrect. In particular, there are contexts in which each other and one another are subtly different in meaning. When speaking of an ordered series of events or stages, one another is the preferred form. Thus the sentence The waiters followed one another into the room was preferred by 73 percent of the Usage Panel to the sentence The waiters followed each other into the room. •Each other should not be used as the subject of a clause in writing. Instead of We always know what each other is thinking, one should write Each of us knows what the other is thinking. •The possessive forms of each other and one another are written each other's and one another's: The boys wore each other's (not each others') coats. They had forgotten one another's (not one anothers') names.