I have a Desire Z and when moving to fast the compass hardware starts to return totally wrong values. Its probably the hardware which can't measure correctly when moving to fast but i want to know if all devices have this problem.
You can try it with your own phone by installing any compass app (don't use Google Maps cause they switch automatically to GPS-compass-mode when moving). I need to know this because for Augmented Reality applications its still relevant to know where the user is looking when being in a train/car.
I wouldn't even expect a conventional magnetic compass to work correctly in the steel cage that is a car. On an train that draws electric power through the third rail, I've seen the dial flip through 180 degrees as it draws current on acceleration.