That did the trick! I set a lock screen pattern and now the lock screen comes on when I get close to the magnets but it doesn't actually unlock. The magnetometer still detects when I'm in range but the screen stays locked. No more pocket dialing!
THANKS!
There is also an app in the Marketplace called NoDock Free (and donate version eg "pro paid version." This app requires root, but it stops your phone from doing ANYTHING when it comes in contact with magnets on a hardware level, since you have to be rooted. On the other hand it doesn't require you to use a lock screen if you don't want to.
I tried it for a bit, but ultimately I didn't have a problem with magnets, just not wanting the multimedia dock to open when I put it on for a charge. I have been using Dock Nothingness for the specific purpose of doing nothing when I place my phone in the dock.
Has been working great so far, although I'm going to uninstall if also disabled my car dock, which I haven't tried out yet.