It is a magnetized sliver of steel, set inside a protective case and allowed to swivel freely. There is a sighting aperture on the northseeker, which allows the person using it to find a landmark in the distance to navigate towards. The Northseeker was created by the Skandians.
Will used this to navigate through the Arridi desert in Erak's Ransom, searching for Tug after he was lost in a sandstorm. The mountains of ironstone he passes attract the Northseeker's needle and he is put off course. He loses his way and almost dies before being saved by Umar.