[jpk]

The engine speed sensor picks up the teeth on the flywheel (as used by the starter). The speed sensor generates a pulse as each of the 130 teeth on the flywheel pass it. The reference sensor picks up an iron set screw in the flywheel. It generates a pulse once per revolution. Between the two signals, the DME can figure out exactly where in a revolution the engine is at any given time.

The magnet you picked up may be messing with the signals from the sensors, but it would have to be pretty close to the sensor's flat end (a few mm) unless it's very powerful.

The car will absolutely not run without the signal from the speed sensor. It can (but might not) run without the reference sensor signal, albeit very poorly since the ignition timing will be way off.

The sensors themselves are identical and interchangeable, you just need to make sure that the forward sensor is plugged into the reference sensor connector (BG) and the rearward sensor is plugged into the speed sensor connector (DG) If your harness connector on the back of the cam housing is unmolested, the reference sensor connector should be the one on top.

You can check the resistance of the sensors to tell you if there is an open or short in the circuit (Clark's has the procedure and the values your looking for), but the only way you can really tell if they are working is with an oscilloscope hooked up.