Believe us, Poysyn, we’re trying to be helpful. But like the rest of the people who’ve posted so far, I say write the story and make the “rules” fit what you’ve written. It’s your story, your characters, your world.
Consider that some of the most influential fantasy ever written (Robt. E. Howard’s Conan and Fritz Leiber’s Fafhrd and Gray Mouser stories, for example) was humans-only. The rare appearances of non-human characters in Leiber’s work were special cases, and they didn’t fit any of the Tolkien stereotypes.
Magic is just the same – make it work the way that helps your story grow. David Eddings’ magic was instinctual and based on force of will (and, near as I can tell, only usable by descendants of people educated by the gods). On the other hand, Michael Moorcock’s magic was learned and studied, available to anybody with the resources, desire, intelligence, and time (still very few people).
The only reason to get caught up in rules and stereotypes is to evoke nostalgia or parody for what’s come before, IMHO. If you want the readers to hear dice rolling whenever anything happens, that’s fine – it worked for Joel Rosenberg, and it can work for you.
To make a living, breathing world, just try and remember that nothing is static. If the bad-guy race is stronger, faster, more intelligent, longer-lived, and has a higher birth rate than humans, then the bad guys should own the world. If magic is easy, cheap and/or usable by everybody, then the world probably won’t look like Dark Ages Europe. If magic can create something out of nothing (“Hmm, I need 11 tons of gold to pay my army. POOF Ah, there we go.”) and aren’t limited in any way, then wizards will be the ultimate power.
To make a long story short, I’m copping out of giving any advice on what you should do. I’d rather wish you good luck, make sure you’re aware of the amount of freedom you have to create this thing, and hope to see the fruits of your labor sometime.