We show that the investigation of magnetic properties is the best tool to identify and quantify the impurities and defects that limit the ability of the lamellar intercalation compounds for use as cathode for Li-ion batteries. The results are illustrated for LiNiO2, LiNi(1-y)CoyO(2), LiCoO2, LiNi0.5Mn0.5O2, and LiNi1/3Mn1/3Co1/3O2 (LNMCO). Despite the extensive studies of these ionic compounds in the past, not only for practical use, but also for themselves, the present work reveals that the magnetic properties of these lamellar compounds have been largely misunderstood, and that, at contrast with the common belief, they do not belong to the family of two dimensional frustrated antiferromagnets. The misunderstanding comes from confusion between extrinsic and intrinsic effects. This distinction allows for an overall understanding of the intrinsic properties of these materials, and opens the route to their optimization, in particular for LNMCO that is the most promising element of this family. (C) 2010 Elsevier B.V. All rights reserved.