<br /><br />A magneto works by whizzing a magnet past a "coil", wrapped round an iron core. This induces a low voltage current in one winding of the coil. When the contact breaker opens it shuts off this current, causing the magnetic field in the primary coil winding to collapse. As it does so it induces a much higher voltage in the secondary winding which is earthed through the spark plug....being a high voltage it can jump the gap to earth.<br /><br />There's not much to go wrong, and old magnetos can keep working for decades (well, on old motorbikes they do). Usual reasons for not sparking are maladjusted point gaps, or especially dirty or pitted points (even a trace of oil on the points can mess things up).<br /><br />Older coils did not produce the oomph of today's replacements though. If cleaning and adjusting the points and replacing the plugs doesn't help, check your high tension leads for any possibility of a leak to earth (cracks etc). Then mebbe look at replacing the coils.<br /><br />Good luck. 
