It's true -
Magnets MAY harm Ipod Touch. I bought myself a swish looking suede flip cover secured with magnets. My iPod started acting up like crazy: crashing twice a day or more. Sometimes I could bring it back just by powering it up again for a bit. Other times I had to hard reset, after which the iPod needed to be restored for goodness sake! Thankfully, I read this article, discarded the case last week and haven't had a single problem since.