Stuck on calibration for (LSM303) Accelerometer

I verified using my iPhone compass, found magnetic north, and then faced my sensor in the same orientation (make sure it is horizontal so you don't have to deal with tilt compensation). Your magnetometer should show 0, at magnetic north (or at least is how my my HMC5883L is setup when reading raw values). If it doesn't, you can create an offset so that it is 0 at north. Then rotate it 180 degrees and make sure the raw value goes to max, and then returns to 0 when back at magnetic north. If for your application the sensor will never be tilted, this may be all you have to do if everything checks out. If the sensor will be at other orientations other than horizontal, you will need to look into tilt compensation.