Magic! I know that you'd like to see lists of spells and magic schools - or at least screenshots of their menus - but please understand that I am not allowed to post them. Still, I can try to give you a general idea of how magic works in the game (at least at the moment, because I have no idea of what changes -if any - the devs may have in store).
Everyone starts the game with one magic school (Lesser Magic) at skill level 1 and two free spells in this school (Mana Missile and Heal Self) also at skill level 1. In order to cast it is necessary to have a staff, which can be found on monsters, in shops, or on other players. Once you equip and unsheathe a staff you are in first person view, but before you can start casting you must select and load a spell.
When you load a spell your hands and the staff appear into view in front of you and the spell icon appears in the unnumbered slot under the hotbar. It may be easier to follow this description if you click on the image below to view the full screenshot. Look at the hotbar on the left. You'll see that there's a symbol that looks like a bluish comet - it's the icon for Mana Missile. It appears in two places: in slot 8 of the hotbar, so that I can load it by pressing 8 (or in theory by clicking on it), and in the unnumbered slot under the hotbar, to show that it's the spell that is loaded at the moment. If I was using a bow, that slot would show the bow icon, if I unsheathed a sword, it would show the sword icon, etc.
Once your spell is loaded you can cast with the left mouse button. If it's a directional spell it will hit where you are aiming at with the crosshairs. Mana missile doesn't have a cooldown and is very quick to cast, so you can keep firing it until you run out of mana. Heal Self has a longer casting time and a cooldown of a few minutes, displayed on the spell's icon by a semi-transparent grey layer which disappears gradually.
Mana Missile doesn't hit the spot in your crosshairs immediately. It takes a few moments to fly there (it's the blue circle in the image above), so you need to anticipate where your target will be if it's moving just as you'd do with arrows.
In the image above my mana missile is about to hit the point that I was aiming at with the crosshairs when I cast it. It looks as if it may miss (that hobgoblin was moving), but actually it's likely to hit because Mana Missile does splash damage (i.e. area damage in a very small area). If it was an arrow I'd have probably missed (no splash damage with archery, at least not with normal arrows - assuming that there are other types).
Splash damage means that you may shoot at the ground right under a target's feet or at a wall right behind them and still hit them, but I haven't checked whether you do less damage than with a direct hit. There is also critical damage, and again I don't know if there are differences in frequency and/or damage for direct hits and splash damage. If anyone - friend or foe - is close to where you hit with the spell, the splash damage will affect them as well. Bye bye blind zerging! Mind you, I don't know if splash damage applies to all damage spells - I've only tried Mana Missile and there are lots of spells and magic schools.
Which brings me to the next point, skilling up and branching out. Every time you cast a spell successfully you receive a small increase of skill both in the spell itself and in its magic school. When a skill level reaches the next integer you see a skill-up message like in the screenshot (e.g. if you go from 20.1 to 20.9 you don't see a message, but if you go from 20.1. to 21.3 you do).
It won't come as a surprise that the two starter spells are very weak, especially at the beginning. Someone who skilled up Mana Missile to an x amount said that he was now casting two blue circles but the damage was still not great.
In addition to the two starter spells there are other spells that you can use at skill level 1 of Lesser Magic if you buy them at the store. I bought one, Magic Shield, and when I tried to cast it I was notified that I missed nacre, which is an item that you can find when fishing. I went fishing for about half an hour and found a dozen nacre. I cast Magic Shield and it didn't last for very long (although it would be enough for most PVP encounters), but maybe its duration increases when the skill goes up. It seemed that casting this spell raised my skill in Lesser Magic faster than the two starter spells that don't require components (I can't remember if they are called components, reagents, or something else altogether, lack of sleep is getting at me). Anyway, when you gather materials while you collect ore, stone, wood, etc. or when you skin or fish animals, or as loot drops, you get a variety of items that have tooltips informing you that they are components used in spells. I can just imagine the dollar signs lighting up in the eyes of future crafters/gatherers...
As you skill up in Lesser Magic (and I suppose that it'll work in the same way for all magic schools) you unlock spells that vendors will now sell to you. At the moment you can see all the spells that a vendor sells, but if you don't qualify to buy them they are greyed out. Once you reach a certain amount of Lesser Magic skill, you unlock Greater Magic. Finally once you reach a certain amount of Greater Magic you unlock the other magic schools - or at least so I am told (I never reached the point where I could unlock even Greater Magic, although some testers have).
I almost forgot! Armour gives a penalty to magic (and to a lesser degree to archery). I know this by looking at the character's stats, but I don't know if the penalty affects how much you fizzle or also the spell effects. I'd imagine it's limited to making you fizzle more. I saw that by using archery often (I haven't used magic nearly as much) I was skilling up in "armored archery" and while I am not 100% sure I think that when I looked at my stats the armor penalty for archery had gone down. I may be wrong on this. I assume that there may be also an "armored magic" skill but I don't know for sure.
I hope that this update wasn't too confusing, it's quite late and I'm very tired so I am not sure if I'm making much sense. I saw someone on the forums ask if I actually thought that the game is fun. The answer is yes. It's fun and I enjoy playing it. The reason why I don't wax lyrical about it is that until it happens, I have no idea if it will run just as well with lots of people as it does with few. I'm very confident that the devs are doing a great job because what I've seen so far has exceeded my expectations, but I don't want to start saying that this game owns in font size 30 and capital letters when so far I've been in fights with at most 4-5 other people. Please don't take my restraint for lack of enthousiasm - I'm just trying to write updates as objectively as possible and to limit them to what I've experienced rather than to what I'm wishing or guessing, but I do like the game a lot.
Sorry for the lack of screenshots. I'll post a couple of landscapes of the human lands even if they aren't related to today's topic. Click on the thumbnails for the full image. By the way, see that big mountain? I ran up to the top after taking the screenshot. You can go wherever you like, and although you won't be able to climb perpendicular cliffs you can run around and find other ways up. In addition, castles, docks, etc. sometimes have ladders that can be climbed. G'night!