Can a “pixhawk compatible” external GPS Ublox m8n GPS with compass be used in conjunction with the Navio2?
Yes, but actually Navio2 has M8N built-in.
yes, but I am thinking of redundancy and accuracy
I think in AP, just one compass is used at one time for the filter. There was (is?) no averaging.
I am not sure what will happen if one sensor fails. Regarding the GPS, I don’t know much. I don’t think there is a benefit. Two GPS will not improve anything, because the sat lock is not chip dependent.
GPS is only for redudancy, I have used a dual GPS setup (3DR standard GPS for Pixhawk in combination with already for some time. see also http://copter.ardupilot.com/wiki/common-installing-3dr-ublox-gps-compass-module/
I think I read somewhere something (yes, I know… it’s vague but getting older doesn’t improve your memory) that dev was working on something like averaging on the compas… but everything start obviously with the possibility of adding a 2nd gps and compass, hence my question
I am not sure whether compass averaging is desirable. Usually you want only the external to be active, because of magnetic interference.
Additionally, I never saw code in AP making compass averaging 
What is not there yet, can still be implemented… 
Did not deepdive into code, but based on http://copter.ardupilot.com/wiki/common-compass-setup-advanced/
you are probably wright. AP is capable of having multiple compasses configured, but only uses one. However, I’ve read once an article about what kind of algoritmes you can apply to decide a compass is accurate (and a such can be used as a valuable sensor) or not. I think it is feasible. Although redundancy was never a priority, this starts to change as local legislation for UAV around the world starts to be implemented in very restrictive ways… And of course because of my background in IT, redundancy is a littlebit higher on my wishlist than with other people…