As far as I know, all it does is stop Life Orb. Or is there some amazingly overpowered thing that Magic Guard prevents?
Magic Guard will prevent all damage except from direct attacks. This includes the damage from the Life Orb, without removing the boost, weather, entry hazards, status ailments and moves that hurt over multiple turns like Leech Seed.
Source
Magic Guard not only protects you of Life Orb recoil, but literally any non-direct attack. This means that Pokémon with this ability don't take Toxic damage, no damage from hazards like Stealth Rock and Spikes, etc.