(Video can be seen here: http://www.youtube.com/watch?v=2FvWtEdY4sE)
Frustrated by my obvious failure to reproduce a very very simple experiment I kept fiddling with the position of the magnet and the angle of the laser until I managed to get the laser to bounce off the mirror almost exactly at the center point of where the magnetic effect on the water was. Here is the result. Actually, there were two results. Not to far away ( the images were projected on my garage ceiling ) there was a different pattern. Image #2 below.
I can't say that I know what these images represent, but I imagine them being 2D representations of the underlying magnets effects on water. I'd be grateful if anyone could provide a more scientific explanation.
Anyways, here's what I used and how to reproduce the effects.
( Apologies for the blurry images, I couldn't with the tripod... again. )