Questions on Magnetism and Domains

[Niaboc67]

I understand that only three elements are magnetic: Iron, Cobalt and Nickel, iron being the strongest. This element in it's purest state is un-magnetized, right? Composed of a bunch of crystal magnets or domains. So if you have three ores of each element at their purest form they won't magnetize? If this is true then how did humans come to discover/find out about magnetism in the time of the early Greeks? If this isn't the case how does this element become naturally magnetize. I understand that in modern times we have a machine that can magnetize these elements. So how does this happen? how do make these elements get a north-side and south-side.

And I know this is about the most simple question I can ask. But how do magnets work? especially on the quantum level. I understand that all the domains are in alignment after it's magnetized. Do magnets attract because all the atoms/electrons heads are pointing in one direction while their rears are pointing in another, do they then become attracted to their opposite side?

 

[DrDu]

At least Gadolinium is also a ferromagnetic element at room temperature.
In the case of iron and its ores, like magnetite Fe3O4 (which is ferrimagnetic), the relatively weak magnetic field of Earth is sufficient to magnetize these materials to some extent and this was known already to the old greeks.
A forum is not the right place to learn how magnetism works in principle. There are excellent introductions available, both in printed form and online, e.g. wikipedia
http://en.wikipedia.org/wiki/Magnetism

Btw, atoms and electrons don't have heads. It is rather the orientation of their spin vectors which makes up magnetism.