Magic does work in the latest project SVN for 0.6.3, you just have to compile the latest release yourself. I am one of the head script writers and we are looking for more people to join our development team. The project is moving along faster than ever now.
The current SVN has the following:
Magic and skillups (non status related)
Linkshells
Party/Alliance
enhanced scripting support for large events (multi menu events and such)
Many new GM commands like Speed and level-cap adjustments (upto 255)
Shops (both Guild and Standard)
Quest/Mission tracker (from the main menu)
Enhanced server code
Crafting and skillups
As mentioned weapon skills and related skill-ups do work. The mobs do not fight back yet (removed feature so it could be re-written propperly; was only in place as proof of concept) but they do drop the correct EXP ammounts by their respective level. they also follow/pursue if you attack or change their status appropriately.
Our next release is coming out soon so I advise you keep your eyes on
for 0.6.3 version if you are unable to compile the server yourself. The more help we get the faster this project will go. Just tell Jinx, regiuz, Snotz, Mana, Tenjou, or arcanedemon you want to join the scripting or coding team.