How can you use a bar magnet and a length og string to make a compass?

Well if you manage to tie the string right in the middle, and hang it like that, the magnet would point north, however that's way too inaccurate because a) a sting consists of twisted fibers, and by adding weight, the fibers will try to untwist, thus altering the course of the magnet, and b) it's nearly impossible to tie the string on the exact center, which also affects the accuracy. The best thing to do is to get a bowl of water, and put the magnet on something that floats.