Yeah, LOOM is a good example and a great game.

In Kyrandia 1, you acquire spells along the way (5 or 6 total) and must figure out when and where to use them (very cool).

In Kyrandia 2, you must acquire the ingredients for certain spells in your spellbook (you have to figure out which spell is appropriate, and sometimes be creative w/ the ingredients).

In Kyrandia 3, there really isn''t much magic at all ... but you do have a jester''s staff that makes anyone you touch with it giggle or laugh!

Alex
Atypical Interactive
www.atypical-interactive.com

I A friend of mine made a magic system for a MUD of his, where (Inspired by Mage: The Ascension) magic was simply the ability to alter the code of the MUD. He created a language for it, and then started the players off with one or two commands... they had to find the rest. The thing is, he wrote some HEFTY penalties for syntax errors. ("the demon you accidentally summoned eats you...)