In reply to FesteringSore:
I think the accuracy varies from phone to phone. Mine is totally useless because there's a magnet built into the case, and it just points at that.
My main concern would be that a typical smartphone doesn't have the battery to keep the screen on for a very long time. If you're walking on a bearing in mist, you do need to keep checking it - you end up with a compass that's most likely to fail when you need it most, because you're using it lots. Usability in rain and/or wearing gloves would also bother me, again because it's likely to be a problem when you need it most.
So I'll stick with my magnetized needle in an oil filled plastic bubble. Though if I'm carrying a smartphone anyway, then I'll probably have that as a backup compass - it's not like installing an app adds any weight.