Magic Guard prevents the Pokémon from receiving indirect damage, but does not prevent it from becoming afflicted by statuses that would deal such damage. Additional effects, such as being trapped while bound or having its Attack reduced by burn, are not prevented even though their damage is.
When a Pokémon with Magic Guard is badly poisoned, Magic Guard still prevents poison damage, but it does not prevent the counter from increasing every turn. Consequently, if the Pokémon's Magic Guard is suppressed or changed, it will begin taking poison damage proportional to the counter's current value.
Magic Guard blocks damage from the Gulp Missile counterattack, but does not prevent the Defense drop or paralysis from it.
If a Pokémon with Magic Guard hits a target holding a Jaboca Berry with a physical attack, or a target holding a Rowap Berry with a special attack, the Pokémon will not eat the berry and no damage will be dealt.
Generation IV
If a Pokémon with Magic Guard is paralyzed, it cannot be prevented from using a move due to paralysis, although its Speed is still reduced. A Pokémon with Magic Guard cannot be poisoned by Toxic Spikes.
Generation V onwards
Magic Guard no longer grants immunity to being fully paralyzed and no longer prevents poisoning from Toxic Spikes (but it still prevents poison damage).
Outside of battle
Magic Guard has no effect outside of battle. This means a poisoned Pokémon with Magic Guard will still take damage in the field in Generation IV (but not later generations, because poison no longer causes damage in the field starting in Generation V).
The Pokémon is protected from most indirect damage, such as damage from a sandstorm, a Blast Trap, or getting poisoned. But it takes damage from attack moves.