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Born Max Eisenhardt, Magnus was one of Magneto's aliases, used after being in concentration camps, and living with Magda (the mother of the Scarlet Witch and Quicksilver) after an outbreak of his powers, he assumed the alias of Erik Lehnsherr and moved to Israel where he met Charles Xavier. (source)
So, when Magneto removes the adamantium from Wolverine's body in X-Men #25, why does Xavier call him "Magnus" instead of Erik?
Perhaps it is a continuity error but in Uncanny X-Men 161 (1982) we were first told of the days when Xavier meet Magneto.
At that time Charles Xavier worked at a clinic for Holocaust victims and had befriended a former concentration camp victim who called himself Magnus. Thus Charles first knew Max Eisenhardt or Erik Lehnsherr simply as Magnus.
Taking a leap of logic [please forgive me here] it might be surmised the writer used that name because to Charles this was a powerful moment and the name harked back to innocent days, days before there was a man called Magneto... when Xavier wouldn't have been able to imagine his friend do something like this.
It was an indictment of the actions Charles Xavier witnessed and a prayer to the past.
Now Mags' name and origins have gone through several alterations over the years, the most notable in recent time was the Magneto Testament (2008) [which was an excellent read]. But at the time of X-Men #25 (1993) the writer might have felt Magnus meant something more to the character and the readers... I for one felt it.
It's a known continuity error. I even recall this question being raised in Marvel publications at the time, and several people attempted to win no-prizes by explaining away the continuity issue. Xavier always called Magneto Erik, which was the name he had always known him under (indeed, I never knew Erik Magnus Lehnsherr wasn't his real name until I read your question). It is in fact very uncommon for any Marvel character, other than Magneto's half-gypsy children, Scarlet Witch and Quiksilver, to refer to Magneto as Magnus; certainly not his friends or former friends.
