This might sound really, really stupid, but since the n900 has GPS on it, why not just use the GPS as a compass? As long as it can get a 3D lock, it can tell you what direction you're facing. Even my Garmin can do that.

That would depend on movement - your garmin GPS knows your direction when you're moving down the highway at 60, but not when your standing still (unless your particular model actually has a built-in compass).

I suggest adding wiki page http://wiki.maemo.org/Digital_compass_howto for pure tech info like SW references BOM list

True, but were GPS apps made before the n810 was around? It could be later hardware had such capabilities (GPS) and since everything internally was also the same, you can do the same functionality on the n800 + bluetooth or USB GPS.

So we might see something where the next Maemo Nokia device has a magnetic compass, and software used there could be backported to the n900.

Unfortunately compass is not that easy - it has to be physically connected to the device (as in, turn/rotate with it) otherwise it's not too useful.

My enduring hope is that the unit can be made no larger than a USB stick, enabling you to easily hold the N900 and the compass at the same time.

As I discussed earlier, you would build it into a case which would give a known orientation. The unit, if not the battery, would be on the back of the device.

Actually, I have a pretty good idea now for n900 push if someone who is up to date on fremantle is willing to partner with me (I can put together HW and hopefully do the magnetometer calculations, but these are all very low level things. I haven't touched maemo proper since chinook.)

damn that craves1 for being missing.
someone try and get him into this thread, he might be able to help.

I was pleasantly surprised to discover that the parts necessary for an analog compass solution are available in off-the-shelf form.

Here's the idea.

0. Hold the device in landscape mode. World-facing camera is facing forward; user-facing camera is facing the user and is at the upper-left corner of the screen.
1. Place a periscope-like mirror on top of the user-facing camera. This directs the line-of-sight of the user-facing camera downwards. Such a periscope mirror, intended as a phone accessory, can be seen here, here, here and here.
2. Hold a miniature ball compass beneath the periscope mirror. Such a ball compass, intended as a phone accessory, can be seen here, here, and here.
3. Use image processing to capture the image of the ball compass and determine its orientation. Make this orientation available to other applications such as AR or mapping apps.

The merits of this approach are:
1. Cheap.
2. No power needed.
3. Relatively small: parts are originally intended for mobile phone use.
4. Graceful degradation. Just by having the analog compass available, you can manually look at your orientation and drag an on-screen compass to rotate a map or an AR display. With the mirror and the image processing, this could be automated, but automation is not strictly necessary.

I managed to find these parts in a local store, but you can probably order them over the web as well. Total cost was around $30.

The main technical hurdles to implementing an automated image-processing solution would be:
1. Sufficient lighting for the camera to recognize the compass. A small battery-powered LED might work.
2. The ability to use both cameras at the same time (world-facing camera and user-facing camera). Unknown if the hardware supports this.
3. Mechanical: some kind of a bracket to hold the mirror and the ball compass in place.

Given the difficulties posed by a real digital compass solution (tiny parts making for difficult soldering, high cost, external battery, lack of USB host), the analog solution seems to be an alternative, at least for people like me without skills in surface-mount soldering.

At least, buying these parts gave me something to do while I wait for the N900 to become available