Alchemy as "scientific magic" is a good direction to go in for dwarves, I'm thinking a bit like the "alchemy" in the Dragon Quest games, where taking one (common) object and combining it with one (rare) objects results in one (extremely rare, alchemy-only) object.
One bar of platinum plus one diamond, plus sufficient degree of Alchemy, yields one lump of Orichalcum, which can be used to transmute a base element into Unobtainium at will. Unobtainium does whatever Toady decides it does, rather like Slade, only controllable and defined by user desires.
Alchemy would be one school of magic, perhaps the most "dwarvenly". Glamour would be the most "elven", and Enchantment would be the most "human".
Alchemy would basically be the previously mentioned combination of existing objects into rare (magical) ones.
Glamour would be the temporary substitution of existing objects into other objects, such as turning a wooden spear into a steel broadsword for the duration of the spell.
Enchantment would be adding magical variables to existing objects to make them more efficacious, such as making the aforementioned wooden spear into a wooden spear that becomes more useful against a specific species of megabeast, but is still largely dependent upon the skill of the user.
In Fortress Mode, Alchemy would be the most common form of "magic" outside of possible artifact-based effects, as dwarves have mastery over it in comparison to other races. The other two schools would be wildly more useful in Adventure Mode, and would make playing an elf or a human over a dwarf an actual decision rather than a preference.
Observing some of the suggestions in this thread, I also amend my previous artifact-based suggestion to allow "control" of certain forces... rather like the Sorceror's Apprentice's magical hat. The wearer of the magical crown could activate existing statues into golems, for instance, at the risk of eventually going mad if using it for too long.
I still like the idea of ghosts and spirits that can't harm or be harmed by dwarves, and might even "haunt" abandoned parts of the fortress, like the empty barracks that are often built during construction of the main fortress. They would just flicker in and out of existence and would add even more depth to the already existing DF afterlife, and possibly even make it possible to resurrect dead dwarves if a successful attack on Hell happens. If you have a ghost issue, and you succeed in finding the ghost's soul in Hell, for instance, you could perform a small ritual to bring the dead dwarf back to life. It would be A LOT of work, but it would be an interesting personal quest to take up if you feel like it, especially as Fortresses start developing hero cults and legendary leaders, as they are already starting to do now.