Magic

"Any sufficiently advanced technology is indistinguishable from magic."

That quote from Arthur C. Clarke is probably as good a place to begin this discussion as any. What is magic? As with the question "what is reality," the answer is multiple choice:

Magic is manipulating nature through apparently impossible means. Aleister Crowley defined this as effecting change in accordance with the magician's will.
Magic is the active aspect of religion.
Magic is the work of the devil.
Magic is a method of duping the weak-minded.
Magic is the stagecraft of illusion.
Magic is anything that doesn't lend itself to easy explanation.
All of the above.
None of the above.
Some of the above.
Much weirder than any of the above.

It's probably best to break the topic down into bite-sized chunks.

Manipulating Nature

The original and still best use of magic is as a tool to get what you want. Easy enough, but there are a variety of techniques, all of which have a few common denominators. First, the practitioners of each tend to hate each other. Second, none of them perform extremely well in controlled settings such as scientific laboratories.

The major schools of magic are:

Traditional Magic: Traditional usually refers to longstanding schools of knowledge passed down orally over the ages, often within families. Witchcraft is one of the most visible of these practices, Shamanism is another. These practices usually include legit herbal and medical knowledge.
Ritual Magic: Also known as ceremonial magic. This is the stereotypical picture of the sorcerer muttering in strange languages over a pentagram. It's a highly structured form of magic that use arcane rules, symbols and/or languages according to strict formulas, often claiming to be derived from ancient traditions. Aleister Crowley is probably the major modern figure in ritual magic. Practitioners include the Golden Dawn, the Ordo Templi Orientis, Masons and other "secret" societies.
Sympathetic Magic: Often incorporating elements of the other schools, sympathetic magic is based on the idea that all things are connected, and therefore power can be derived by using fetishes, which are powerful symbols of the magician's intention and/or items once connected physically to the intended object of the magic working. A Voodoo doll is an example of sympathetic magic.
Demonology: Magic based on the principle that unnatural things happen only when one properly invokes the right demons and spirits.
Religious Magic: Jerry Falwell would prefer that you call this "prayer." See also (Broken link for Novenas), Relics, Faith Healing and Miracles.
Chaos Magic: This means different things to different people, but very broadly it's an approach in which the magician steals whatever he or she thinks will work from whatever other category. It may also include elements of chaos theory, quantum physics and cybermagic, applied with varying degrees of actual scientific understanding.

Religion and Magic

No matter how much they would prefer to deny it, all Religion has an element of magic to it, whether it's Christianity, Islam, Judaism or Buddhism.

Religious magic comes in a number of flavors, the most common of which involves invoking the name of a supernatural entity and petitioning said entity for favors, usually in a very stylized format. Widely referred to as "praying," this has long been considered one of the most ineffective forms of magic.

Some religions have specific schools of magic. Judaism has the kabbalah, Islam has Sufism. Buddhism is associated with a variety of magical and healing practices, based on regional traditions.

Christianity also has magic, but they get really pissed off when you call it that. Roman Catholicism has the most developed magical rituals, with novenas (ritual magic designed to manipulate reality), Relics and Talismans aplenty, and secret(ish) rituals like Exorcism.

But Protestants have their fair share of magical practices as well, many centers around invoking the name of Jesus Christ. Other Protestant practices include ritual possession (speaking in tongues) that is very similar to Voudoun and Faith Healing, a staple of Televangelists.

Magic and Satan

Despite the fact that all religions include magic (see above), many of these same religions thoroughly denounce magic as the work of Satan and insist that any effort to cause other-than-natural alterations to one's environment.

While some magic practices are based around this concept, the vast majority of currently surviving types of magic tend to eschew the whole idea of Satan as an oppressive tool of the reigning authority structure.

You will find extraordinarily few individuals who will cop to the fact that they actually invoke Satan or anyone resembling him, but they are out there if you're sufficiently motivated to find them.

There are, however, a number of magic schools which involve the worship and/or befriending of non-Christian deities (such as Odin, "the Goddess," Isis or Shiva) which in the minds of many Christians automatically qualifies as Satanism.

Magic for the Masses

Whether as a sincere effort or a deliberate fraud, one of the most effective ways to control people is to convince them you have magical powers, the effects of which they are subject to, but the secrets of which they have been denied.

This involves pretty much the same dynamic as duping people on the basis of religious authority. First, you convince them to believe the general principle, then you convince them that you (and only you) are the one true incarnation of that principle.

Cult-style Mind Control is often based around one or another claim of extraordinary powers, whether it be the ability to save your soul, to channel extraterrestrials, heal the sick, whatever.

First you convince people they have seen something unexplainable. You're halfway there. Once their sense of reality has been shaken, all you have to do for a follow-up is present an explanation they can accept. It helps if you can repeat the initial unexplainable thing at will.

Stage Magic

Stage magic is a weird outgrowth of traditional magic, in much the same way that Professional Wrestling is a weird outgrowth of traditional wrestling. Stage magic is almost always performed by a male, and usually a flamboyant and irritating male who would not be welcome in your home for dinner.

In stage magic, the magician gets up before an audience and performs seemingly impossible stunts like mind reading, sawing a woman in half or making the Statue of Liberty disappear.

Despite the often very impressive nature of these feats, the stage magician does not attempt to present himself as a spiritual leader, instead offering up his miracles with a wink-wink admission that it's a trick and daring the viewer to try to figure it out.

Although entirely innocuous (and usually vacuous), stage magic is nevertheless condemned by several stripes of fundamentalists as somehow glorifying Satanism or Witchcraft. These charges usually come from people who would be a lot better off getting a life.

Unexplained Phenomena

Here's the funny thing. Science has generally been unable to measure, replicate or prove the vast majority of claims relating to magical power (with the exception of some healing practices, which do have some measurable benefits). But the underlying principles behind magic haves actually gained ground over the last 100 years, as science unfolds the secrets of time, quantum physics and chaos theory.

Consider just a few choice examples:

Einstein initially discovered that time is not a static straight line as had been traditionally thought, and quantum physics has substantially muddied this issue. Quantum physics now stipulates that information and even matter and energy can travel backward through time under certain circumstances.
It has been discovered that something measurable in the structure of the brain actually anticipates events before they happen. An experiment several years back proved this monitoring brain activity during a simple task such as catching a ball. The brain starts sending impulses instructing the muscles to properly catch the ball before the nervous system has time to legitimately process any data relating to where the ball will end up.
Chaos theory, the study of mathematical principles driving organic and complex phenomena, has proven the old credo of the ritual magician: "As above, so below." In its simplest form, both concepts state that the workings of the universe follow specific patterns, and that the patterns behind large scale phenomena are essentially the same at small and large scales.
There is a chapter of a documented medieval Latin translation of the Jewish kabbalah that explains the relationship between spirit and body in almost the exact terms that Einstein used to explain the relationship between energy and matter.
The concept of the aura, soul, spirit or energy body is a staple of many magical traditions. We now know that the human nervous system does produce a measurable electromagnetic energy field (although our current understanding prohibits the conscious use of this energy field in any particularly constructive way).
Quantum Physics stipulates that the act of observing something inherently changes the thing being observed. While this is not currently believed to apply to phenomena larger that the subatomic level, the very idea was mindblowing enough to send theoretical physicists into conniption fits for the better part of a century. And of course, for the magician, it's tempting to apply "as above, so below" to the notion...
Several healing practices once thought to be entirely magical in nature are now widely accepted to have real therapeutic benefits, including Acupuncture, acupressure, herbalism and "therapeutic touch" (the latter is still controversial). The underlying idea behind Homeopathy is very similar to the concept behind vaccination. (In practice, however, it's a lot better to get vaccinated.) Other techniques, such as Reiki energy healing, are not proven but generally manifest at least a placebo effect toward well-being.

Generally speaking, the scientific breakthroughs of the last several decades have cast serious doubt on specific practitioners of magic while at the same time strengthening magic's underlying concepts. Any sufficiently advanced technology could end up making ancient ideas a firmly accepted consensus reality.

What this boils down to is a fairly familiar story in the history of the human race: A bunch of people had generally the right idea but managed to fuck up the execution.

Of course, you can apply that statement to just about every human endeavor, whether it be magic, democracy, atomic power, medicine, sex, religion, the 1960s, relationships, television, or traffic laws. As above, so below...

Spells

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