I was similarly disappointed with a Victorinox (The Swiss Army knife folks) watch I bought that had a compass on the watchband. The watch works fine, but the compass was worthless. Sometimes it would work okay if you beat it against something, but it generally just pointed off in a random direction, even when I took the compass off the watchband. I finally spend four bucks on a little Coghlan's wrist compass and stuck that on my watchband. Works like a champ!

Incidentally, the Coghlan's wrist compasses are easily disassembled into a tiny 1/2" diameter liquid-filled compass which works beautifully in a PSK! <img src="images/graemlins/grin.gif" alt="" />