The attraction of the lodestone to iron was known in Greece in the 7th century BC. The Greeks didn’t use a compass, they judged the direction traveled by the winds.
The Chinese discovered that the Earth has a magnetic field about 2000 years ago, but noticed that it didn’t point to true north a few centuries later, probably as a consequence of widespread seagoing trade during the time when Roman Empire and Han China were at their peaks, a period that has been described as the happiest time the Earth has ever known. Of course, they didn’t have streaming vid back then.
The Han court records record a visit from a Roman trade expedition during the time of Marcus Aurelius. At another time the Chinese sent an ambassador toward Rome, by sea; unfortunately they wound up in the Persian Gulf and did some trading with the locals there instead.
The early European compasses consisted of a magnetic sliver stuck through a couple of small pieces of cork to make it float on water. After 1492 the deviation of magnetic north from true north was rediscovered.
http://www.magnet.fsu.edu/education/tutorials/timeline/600bc-1599.html
http://en.wikipedia.org/wiki/Classical_compass_winds#Homer
http://www.freerepublic.com/tag/antikytheramechanism/index
Then how come Homer`s Iliad [1300bc] of 12 cities point magnetic north duhhh???
How did ancient Egyptians know how to algin their beds to magnetic north?
Can`t prove a negative but positive evidence must be taken into account.