Can more than one person look into a palantir at the same time? Is it all one big round screen, or is there a "viewing face," with the rest of the surface around it just being cut rock? If the latter, there'd only be one direction it could be viewed from, hence no magic compass would be necessary.

The viewscreen simile actually makes sense, except that Sauron's version also transmits Psionic Mind ControlTM. Don't know if it's relevant to muse idly that early TNG screens appeared to be three-dimensional--when viewed at the the right angle when in use, Captain Picard and the Romulan Commander Du Jour would appear to be looking at each other and not at your TV--but later they seemed to go back to not bothering with that.