Until you not complete the calibration (or after a soft reset) it will appear at start.
The bubble compass is a little bit difficult. But I'm thinking about it.
I think and that's what I experienced, the compass only works correctly when the phone is near or in level position.
Uh, yes it does, and this is one of the very cool things about the O2 -- it uses both the fluxgate data and accelerometer 3D orientation data to compensate and make the compass pretty accurate over a wide range of device positions -- it does not need to be perfectly flat for a good reading.
I've done some extensive testing with the O2 and a Garmin eTrex Vista (which also has a fluxgate compass), and there is no question the O2 is compensating for orientation.
The upshot of this is that it makes the O2 an actually useful compass. Put together compass, 3D orientation, GPS, the camera, and a POI/mapping database, and some totally awesome augmented reality stuff can be done. HyongSoft -- the Omniano-no-Piano-Concert guy -- is doing just this, and has been saying he will release this app shortly. I can't wait.