what does Limewire Magnet as your default ?

If you wish to downld a magnet link, then LW will downld it for you. You'll be asked that question if you have another p2p program that wants to be your magnet handler. eg: Try any of the free and legitimate files from http://magnetmix.com/video.shtml

You can also create your own magnet links & send them to friends. They can type the magnet link into their browser address bar & then LW will start downlding the file. Little like direct connecting in a way I guess. But of course if they're downlding from you then they can probably browse you also.

does that mean that a magnet link would take over other sites on your computer like ares?

If you use Ares to downld magnet links then it might be. But generally most p2p apps ask (& many don't) before they change to become your default magnet handler. If Ares doesn't ask to change it back & does it automatically then it shows a lot of arrogance on the part of Ares. Your choice. Don't know why you'd use 2 Gnutella clients. But do you actually use magnets with Ares.