Magnet Closing Cases Will It Damage iPhone 4

No damage, but Apple specifically recommends you NOT use such a case with the iPhone. There is a risk of interference & things not working properly. Remember, in addition to being a phone, there is also a compass & GPS chip in your phone.

For my own future reference, can you provide the link to where Apple makes that recommendation?

Thanks!

magnets only interfere with magnetic storage like harddrives which iphones using flash don't have

You want to follow Rudegar's advise or Apple's:

http://support.apple.com/kb/HT2342

Again, no damage, but...it's your phone, your choice.

The article you link to doesn't say that cases with magnets will cause issues nor does it say don't use them unless you determine that it is the cause of the problem. Even then, it doesn't say that it will cause damage, but rather is one possible cause of interference.

Cases with magnets are used with many phones to no ill effect. In fact, Blackberries use cases with magnets to activate certain features. Motorola Droids use docks and car mounts with magnets to launch certain applications.

To the OP: I've used cases with magnets for years with smart phones and iPod Touches. I've never had a problem.

magnets on mobile phone cases aint strong enough to damage or interfere with anything, the compass isnt a magnetic one anyway so there should be no problems there either.

I have a magnetic case for my iPhone 4 and it does cause issues with the compass. In the case, it always says 'compass interference' and tells me to wave it in a figure 8. A couple seconds after I take the phone out of the case, the interference message dissappears and the compass points in more or less the right direction. However it works (I don't know) it's clear that being in my case prevents the compass from working. Nothing else seems to be affected, including GPS, which works perfectly in or out of the case.