In Cinema 4D, modeling with the iron and magnet tools provide a complement of effects and modeling capability. Quite simply, the magnet tool 'pulls' on your surface, pulling at the defined focus point allowing you to pull up that section of your object. The 'iron' tool 'pushes' against the entire surface.
A great way to see this is starting with a simple 'plane' object. The default plane in 12.0 has 20 segments in width and height. This presents several points to the magnet tool which you access using the point modeling tool. Choose plane from your primitives. Make it editable entering the 'C' shortcut or choosing the menu option at the top left of your tool modeling menu options.
Once your plane is editable, right click on the stage and choose the magnet tool from the set presented. Once chosen, it has a cute little magnet style icon to let you know it is active. It also appears on the right hand side under 'Attributes' with its selectable options. Most of these are intuitive and the magnet tool to me is a true modeling tool. You need to play with it more than calculate exact changes.
The magnet tool has several modes from default 'bell' to 'needle'. The difference is how the magnet is applied. As you draw your object to you, in the bell mode you will see a bell shape of the material affected by your action where the needle mode will pick a single point and you will pull that single point to you. The difference of course is that of a smooth distributed transformation versus creating a spike, a single point pulled away from the surface like a sharp mountain peek.
Speaking of mountain peeks, this is one of the things that the magnet tool is best suited for and that is creating environment with the natural diversity of sharp peeks and bell shaped valleys. Create rolling hills and pasture or a stark bluff with sharp faces.
The magnet tool suggests a tool that 'pulls' … and it does but it also 'pushes'. If you push into your plane with the magnet tool, you will create a valley. If you 'push' with magnet in needle mode, only one point will be pushed inward pulling the adjacent points with it. If you 'push' in dome mode you will see the effect of pushing a ball, a dome into your surface with a smooth rounded effect on the surface you model.
The iron tool is a bit more limited. As you pass your 'iron tool' across the modeling surface it 'smoothes out' contour and ridges. It is less definitive with a percentage setting that routes its smoothing effect but the effect is distributed across the entire surface of your object. It does not have the different 'bell', 'needle' model options that defines how it 'smooths' a surface.
I think of the iron tool as helping you fine tune the 'near finished' product, 'smooth out the wrinkles' so to speak. Working together with magnet tool, you find versatility modeling landscapes … and other shapes from your imagination!