most all blocks use some sort of iron liner. camshafts, followers, valves, oil pump, gears, timing chains, rockers, etc are all normally made out of some sort of iron or steel.
i know that there are titanium valves and springs, aluminum rockers, some engine dont even have rockers.
but my point is that there are still alot of magnetic parts to an engine. a magnetic drain plug is still probably very usefull for an engine.
they certainly work wonders on a transmission weither its an auto or manual. they work pretty good on rear ends as well.