Torque experienced by compass needle

[Qaztgbe]

The torque experienced by the compass needle is m X B , m being the magnetic moment of the compass/magnet and B being the Earth's magnetic field. The magnetic moment is along the axis pointing from South to North and the magnetic field will depend on where the compass is on the surface of the earth.

I can't understand how it's experiencing a torque. Doesn't the needle always point in the direction of the field? Won't the axis be in the direction of the field itself? How is the angle between them anything other than 0°?
How does the angle of dip contribute to this torque? Infact, I can't even understand which component of the Earth's magnetic field is causing this.
Any links to images of the field etc. would really help.

 

[cragar]

the Earth's B field will torque it until it reaches equilibrium.