I've never used individual magnets, but I've built and sold almost 80 of them now with a single magnet from a hard drive and had great success with that. The rheostat will get hot because it's dissipating all the heat from the current the fan wants to draw. That's why that design is just not the best way to do it. Not only that, but it can't compensate for fluctuations in line voltage.
Google the LM317T voltage regulator and built a circuit around that. You can probably use most of what you already have. You don't have to use the capacitors, they just make the fan run a little smoother but at a minimum you just need the LM317, a potentiometer and a resistor.
It works much better!