Soooo... basically it's the difference between Iron Heroes style magic (where you just draw power, shape it by will, then unleash is), and Eberron style (where it takes the place of technology).
Just throwing my two cents in, but for fortress mode I think it should be divided up into different kind of professions much like military classes >_> you'd need a Arcanary (or something) to make the appropriate stuff though...
Different Job types (All under the heading "Wizard")
Mage: Fire balls, lighting, ice, the battle stuff, all should be dangerous so you don't deploy these guys lightly.
Priest: Powers more affected by their god, but generally healing, warding against hostiles (either by making areas temporarily "fear causing" for certain creatures, or by boosting over all armor on certain dwarves), blessing stuff temporarily that within their god's influence (if you check a god through a dwarf's relationship screen, it tells you domains)
Artificer: Makes mundane magical items, kinda like artifacts, but FAAAAAAAAAAAAAARRRRR less powerful.
Mage and Priest could be equiped with totems, staves, and wands. each with a different type of spell. (Mage: totem=ice, wand=fire, stave=lightning; Priest: totem=blessing, wand=warding, stave=healing.)
There could be random variables in how much protection is given for example, or maybe even a back fire where it does the opposite of what's intended.