Usure about the reliability of this site, but it's interesting and seems plausible:
http://home.earthlink.net/~herbrose/magexp.htm
HOW DOES MAGNETIC STRENGTH DECREASES AS DISTANCE INCREASES?
To determine how magnetic strength changes with distance we go back to where the adding of steel washers onto the magnet increased the magnetic strength between two magnets. Instead of using a steel washer where the induced magnet strength varies we will thread one of the magnets up the rod about an inch from the magnet at the bottom of the rod. The rod is then hung over the aluminum block and magnet on the scale so the bottom magnet is about a half inch above the magnet on the block. A mark is put on the top magnet and then the magnet is screwed down one turn. The incease in the attractive force between the bottom magnet and the block magnet is noted then the top magnet is screwed down another turn and again the increase in magnetic strength is noted. From this it can be seen that the strength of a magnet does not decrease as a cube of the distance but linearly with distance. Each turn increases the strength the same amount until the magnets get close together and there are more flux lines per unit distance. The idea that the strength of a magnet decreases as a cube of the distance must be a result of measuring the attraction with an iron or steel block where the varying strength of the induced magnet changes the strength of the magnet and the intersection point of the flux lines. By using a permanent magnet of equal strength the variance of induced magnetism is removed.
CONCLUSIONS
You cannot test magnet force using steel or iron blocks since an induced magnetism will give varying results. The force between two magnets is not equal to M1M2/d^2 but closer to (M1 +M2)/d and is actually (M1 + M2)(combined flux lines)/total flux lines
