I have the mylar circle on SM. There is no adverse affect on the magnet performance, and the mylar eventually gets chewed up (along with the magnet), but generally does the job. Considering the mylar is far cheaper than new balls you can replace it as often as you like. Those magnet cores can be buffed out, no real need to replace with a new one, but you definitely want to avoid magnet mushrooming, as that will damage the wood. My magnet core was buffed to a super high shine, and adding the mylar on top was the only real way to retain that polish for as long as possible, along with protecting the edge of the wood, which was also repaired.
For games like XM and IM, the goal is also to protect the playfied around the magnet.. for that I've installed the mylar donuts which sit on the playfield completely around the magnet core, and they hold up very well. They are best for magnets that whip the ball around the playfield as over time the wear will extend beyond the lip around the magnet. I have yet to see any wear on the mylar donuts.
http://www.marcospecialties.com/pinball-parts/803-5000-MG
Here are pics of the SM with mylar on top and XM with mylar around..
sm_magnet.jpg
xm_magnet.jpg