Magnets and electronic devices have been enemies for a long time. In order to reverse the trend, the new devices are being designed so they are not damaged when magnets are nearby. The first-generation iPad is not affected by magnets, but interestingly the iPad 2 is.
No Magnets Required
The reason the original iPad is not affected by magnets is that the device does not use magnets for shutting down and opening up the screen. The iPad 2 does use magnets, so the screen will turn on and off when the covers are put in place. People have discovered that you can actually play around with the location of the apps by using a common kitchen refrigerator magnet on an iPad 2, as long as no apps are being used and the iPad needs to be locked.
It is possible to shut off the settings for unlocking and locking the screen, but then your iPad 2 screen will stay up all of the time. You will have to manually shut the screen off, otherwise your battery will quickly drain.
Flash Memory Changed the Game
New electronic devices are no longer in danger of being damaged by magnets because most of them use flash memory. In the early days of computer technology, information was stored on floppy disks. Those disks used iron oxides in certain patterns that computers would read to access the memory. Iron and magnets are attracted to each other; so it was easy to wipe a disk by swiping a magnet over it to rearrange the iron oxides. Now flash memory uses silicon, which is not disrupted by magnets at all. The big worry with modern electronic devices would be an electromagnetic pulse, which would take out most devices very quickly.
Pacemakers and iPads
When the iPads were designed, they actually had magnets put in them so the covers would stay in place. You will not damage your iPad with magnets, unless you happen to find an extremely powerful one (that would damage more than just an iPad). Even though the magnets are rather safe inside of the iPad, they can be potentially damaging to people with pacemakers fitted. When the iPads were placed close to the chest, some people’s pacemakers actually turned off. Once the magnets were moved away from the pacemakers, they did turn back on and worked as normal.