I was thinking that the currents are like this: http://dl.dropbox.com/u/388822/magnet%2Bpipe.png (apologies for the crappy picture). The green lines are the magnetic field lines. These lines go through the copper pipe at the top, and at the bottom in opposite directions. Since the magnet is falling, just above the point where a line penetrates, the flux is decreasing. Just below, the flux is increasing. Hence there should be two opposite currents. When there is a slit, the currents get rerouted like in the right picture. Another way to think about it is that every field line creates a circular current around it. When you connect all these circular currents you get what's in the picture (if I did it correctly).