Okay, as we all know, the main problem with Arcane Magic in 3.5 is that it has too many 'Win' buttons, and can break the action economy too easily. I propose we go back a couple of editions to help limit these problems.
This is designed specifically to plug into and work with the Wizard, or any other class which explicitly casts arcane magic to limit how powerful it can be.
1) Magic Is Slow - In AD&D, it took TIME to cast magic. During which time it could easily be interrupted. Now, d20r already has a couple of things which directly manipulate Initiative. Ranger, I believe, has a class ability which explicitly does this, for example.
So how about this: When you begin casting a spell, you declare any and all variables (I cast a Fireball at this area), and it finishes and produces an effect at initiative (your initiative - spell level). Therefore, if you are on Initiative 15, and you cast a Fireball at a group of Goblins, the spell itself doesn't go off until Initiative 12. If the goblins move on Initiative 13, they could well end up scattering before the fireball lands.
As a corollary to this: Magic normally takes a full-round action to cast, rather than a standard action. This limits their mobility and their ability to flit around the battlefield tossing around Win Buttons.
Now then, Swift action spells (such as Feather Fall) are exempt from this, which makes them very useful, if rare. However, this means we need to strongly look at Quicken Spell (although if you can't reduce metamagic, then it's not so much of a problem, since it's a +4 adjustment).
2) Magic Isn't Easy - Again, in earlier editions, if a wizard got hit while he was casting a spell... it went poof. No save, no concentration check... goodbye. While I don't want to be quite that cruel, wizards do have far too easy a time of casting spells in melee without worrying about getting hurt.
First off, remove Casting on the Defensive. The Concentration check is just too easy to pull off. So any time a wizard casts a spell, he provokes AoO.
Second, if he gets hit by a non-damaging effect which negates his ability to cast (for example, if he failed his saving throw against a Stinking Cloud while he was in the middle of casting), he automatically loses the spell slot, as though it had been cast, but to no effect. If he is affected by a non-damaging effect which does not negate his ability to cast (Ray of Enfeeblement), he has to make a Concentration check (DC 10+HL+Mod) or lose the spell. If he takes damage while casting the spell, he has to make a Concentration check DC 10+ damage taken or lose the spell. If he successfully saves and takes no effect from an effect (for example, if he made his Fort save against Stinking Cloud), and it has no secondary effects, then his spellcasting is not affected.
Third off, spells with no Somatic components do not provoke AoO when cast in melee. This makes Still Spell very valuable, and I find that a +1 SL adjustment is a fitting price to pay for making it safer to cast in melee. We may need to remove somatic components from touch spells, though, to prevent nerfing them entirely. On the other hand, touch spells can be kept charged, so the wizard can cast it on one turn, then step in and release it on the next, so maybe not.
Thoughts? Suggestions? Feedback?