From what I understand, its the actual magnetic field produced by the monitor that when pulsated at various frequencies causes these effects. I don't think its related to epilepsy, but I don't know if the reasons why it works are known.
No, this is about the EM field. The magnetic field of CRTs is very weak (so weak that it is dwarfed by nearby rail power lines which have a rather weak M field as well; so weak that you have to recalibrate for monitor movement relative to earth's M field).
I doubt this works, at all, for a variety of reasons.