I saw this happen on the Cullin ridge last summer, not that I was actually using my compass in anger but just to see the strange effect. It's something to do with the high magnetic properties in gabbro rock in that part of the country.

markl said:

i heard its not very accurate in some parts of the isle of skye due to something in the rock??

Also round Ore Gap between Esk Pike & Bowfell in the Lakes apparently - not seen it happen but in the right place your compass needle will spin...

You need to get a specific compass for the Southern hemisphere or a compass with adjustable declination such as the Silva Voyager series (as mentioned by Lostme)

It is difficult to use a compass up a telecomms mast as the metalwork efects the polarity of the needle. This is a problem as the antenna are positioned using compass bearings. Top quality compasses are used however as a check, a second measure is taken from the ground away from the tower and line of sights found for the positioning of the antenna. 120, 240, 360 degree is the usual.

Generally no, but Silva make their Voyager range, green backing plates, that are designed for world travel, used one for years