While Lords of Magic does fall flat in a few areas, it ultimately has enough going for it to be recommendable.
The basic story that will push you along the game is that the evil undead lord Balkoth has been summoned by Golgoth, the god of death. Now its up to you to rally your faith, reunite the land in peace, and defeat the forces of Death. OK, yes, we've seen all of this before. But its enough to get things rolling through out the entire game. In the game, you play as a wana-be lord from one of 7 races (There are actually 8 races in the game, the 8th being the death race, but you must beat Balkoth in single player at least once to unlock them). The faiths are essentially divided by religion, so you can worship life, earth, chaos, water, etc. While the races all have seemingly unique units, they really all work roughly the same. The tactics you use for each race really don't vary terribly much. Their units are differentiated enough however to make it easy for people to pick favorites.
You always start somewhere in the outskirts around your faith's capital, which can't do much for you at the start of the game. So you'll have your lord and a small force with which to explore the country side for adventure and plunder. Eventually though, if you want to become a legit lord, you'll need to find and take your faith's great temple. Once you do this, the game completely shifts gears, and you begin the game in ernest. You'll have to manage training new armies, resource gathering at the capital, and expand your realm by subjugating the other faiths or taking outskirt villages to build new training structures as you fight against Balkoth and either fight against or ally with the other faiths.
While the first stage of exploration is consistently fun, things can drag out a lot after you take your Great Temple. Since you'll have a lot to manage each turn, each turn can drag out extremely quickly. You'll also be forced to do boring battles against marauding parties, which can cause more trouble than you'd think. So ultimately, the game loses a lot of polish here, but its still great for those who are in for the very long haul. So if you can play entire games of something like say Lords of the Realm 2, then you can easily do the same for Lords of Magic, though you won't enjoy it nearly as much.
The game's combat at least helps break up the drag when it occurs in earnest. While many of the combats later in the game can turn out to be pointless "armies versus one uber-powerful dude" engagements later in the game due to a bone-headed AI, the legit combats are interesting and can be quite challenging when the forces are evenly matched. There are some issues here as well however, such as some lackluster pathfinding. There are some well made battlefields here, but there's not enough variety to them to keep things interesting.
Graphically, Lords of Magic is a little basic, but it has its charm. The units look good and animate well, but they're generic. The environments look very nice however. Sound wise, there's some repetitive voice acting that varies in quality, and some decent battle sounds. It should be noted that Lords of Magic tends to be buggy the longer you play it, and may even crash to the desktop if you play for too long.
Lords of Magic has many flaws and may fall completely flat for some, so your mileage will vary with this game. But if your looking for a decent strategy game, then you've actually got one here.
Pros: Decent combat and graphics. Mimics Heroes of M&M gameplay effectively. Faiths are varied enough so you'll easily pick a favorite or two, or three...
Cons: Game is buggy the longer you play. Late game can be very tedious and drag out. Bone-headed AI.
Recommendable for: Strategy fans should be able to enjoy Lords of Magic. But if you prefer faster paced-games, or already have Heroes of M&M and/or Lords of the Realm 2, then you should probably pass on this one.