Prior to the invention of magnetic filters, the smallest radiator on the system (usually downstairs) would be selected, then a big powerful magnet would be wrapped in a tea towel and placed on it. This acted to collect any iron oxide circulating in the system. The radiator would be removed taken to a drain outside with the magnet then removed it could be thoroughly flushed out with a hose pipe.
Early filters used to just collect debris without a magnet. Any solids would simply settle in the bottom and upon servicing be released into a bucket or tub. Modern magnetic filters will be larger than the pipe work they are attached to giving the central heating water a chance to slow down so that any none magnetic solids can settle to the bottom and any magnetic debris can be held in place by the magnet until the boiler is serviced and cleaned out. There are many different makes and designs with slight differences.
Magnetic filters should not be used in place of a system flush, but as an additional layer of protection for your central heating radiators pipe work and boiler.
Not to be mixed up with limescale preventers which are fitted to the cold water main to help prevent lime scale building up at the boiler or if fitted after the stop tap protecting the whole house.