Rare Earth Magnets in Printing - has anyone tried this?

It works fine... I've done this on several prints.  The biggest one I tried was 1/4 x 1/8.  Just make sure it is below the level of the extruder nozzle and facing the correct direction before placing it in the gap.  Nothing like finishing a happy 3 hour print with embedded magnets only to realize you were looking at the part upside down and putting the magnet in wrong.  I wouldn't know from experience or anything...

I manually pause when using pronterface or put in gcode for RH, depending on which computer I'm using.  So as far as the hole sizes, if I need a perfect fit and can drill, I model it at size with several extra perimeters so there is plenty of solid plastic to bit into.  Obviously, this doesn't work for this kind of print.

The best thing for you to do is to model a plate that you have a bunch of holes and a bunch of extrusions at least a few mm high.  Since, even the best calibrated printers will have some differences, this is the safest route.  It will tell you how big to make what you are trying to get.  I haven't been back at my computer for a while, but when I do, I'll post the .stl I created.  I think it has 25 holes and 25 extrusions at very small increments working their way up to larger increments.  I just go to this every time I need to know how large to model holes and extrusions.  I also made a vertical plate with just holes so I knew how big to make them on walls.  Just to answer your question, I think I made the diameter .4 mm larger for the 1/4 magnet.