Mikey Fremer swears by it. He made recordings on CDs from both the pre and post demagnetized LPs and let people judge to see if there is a difference in sound, everyone heard a difference. The theory makes sense too, at least with LPs but it also demagnetizes CDs, DVDs, etc..
http://www.furutech.com/news/FURUTECHdeMagNews2006.htm
