It is important to note that you must be running your carrier’s official Mango update to have all the necessary drivers on your phone for the built-in compass (which this app utilizes) to function properly. If you installed Mango build 7720 by another method – such as the “trick zune” process – you probably do not have the required compass drivers, and the app will not work as expected.
You can refer to these two pages from Microsoft:
to get a better idea of if your phone has the necessary compass drivers. Very simply, if your carrier or phone is not listed as “Delivering Update” then the compass drivers for your device are not yet ready, and were not included in your Mango download.
So for example, in the US, the HTC HD7s, Dell Venue Pro and Samsung Focus v1.4 are not currently receiving the Mango update, while in the rest of the world, the Samsung Omnia 7 in France and on Deutsche Telekom, as well as all WP7 devices on Telefonica in Spain are not yet receiving the Mango update. If you have one of these devices/carriers, Mango Compass will probably not work for you… Yet.