And Chaos heroes are definitely best with Time magic, and nothing else. Necromancers are also good, but it's hard to find spells in the city. And Wizards with Armageddon, which doesn't work on old Gargoyles and resurrects new Golems!
For heroes whose magic skill doesn't increase, I would advise taking Darkness or Light (whichever suits them better); they don't need it as much. And if a hero's Knowledge skill increases, it's a waste not to take Magic, because you'll have a high Knowledge skill, but you won't be using it. So, for Knights, you probably don't need Magic at all, especially if their magic stats are low, and the same goes for Orcs for obvious reasons ;)
And for Dwarves, Helmar is definitely the best!!! My favorite hero.