Sebek: So how does the Wiz 8 spell system work? I'm not sure what the numbers and all mean and why the spell fizzles, but I mostly go with the low lvl
In addition to what has been said...
Each spell belongs to a magic school (alchemist, priest, mage, psionic) and a magic realm (fire, water, earth, air, divine, mental). The better the character's skill at the respective school and realm, the higher the level you can cast the spell at. In addition, each spell a character knows adds spell points in the realm the spell belongs to.
My magic-using tip would be to forget about the dedicated casters (Mage, Psionic, Priest, Alchemist) and simply take two Bishops as your casters. Make one learn two schools and the other the other two schools. You can teach bishops all the useless low-level spells from all schools and thus have higher spell points to cast spells with. In addition, you will probably never be in the situation that you gained yet another level with your alchemist but you have already learnt all the spells there are to learn. Of course, this might make the beginning slightly more difficult since apparently Bishops reach spell levels more slowly.