I just released a plugin for Minecraft servers running craftbukkit that I have been working on for the past week, that allows you to cast spells by typing them out in chat. For more info refer to the official thread on the bukkit forums. Downloads after the break.
Note that this is no longer being worked on, and in its current state will only work for an old version of Minecraft/Bukkit. Feel free to use the source code any way you see fit.