Well my 3 favorite magic skills are destruction (speaks for itself), conjuration and illusion. Besides summoning creatures, conjuration is great for bounding blades and armour if you need it. I've made a spell that bounds a full daedric armor for 50 seconds. Usually more than enough for any enemy, and you don't have to carry around heavy stuff.
Illusion is great for commanding creatures and humanoids. I never used that in Morrowind, but only 'discovered' it recently in Oblivion. Cast a command spell on anything in an area where there are several enemies, and they'll all start fighting each other. Repeat if necessary until there is only one enemy left. Great show.

And use invisibility (also illusion) to stay undetected while they fight each other, and/or summon some creatures to make it even more interesting.
A command spell need only last for 5 secs or so, since once the enemies start fighting, they'll fight until death anyway. So Command Creature up to level 25 for 5 secs is fairly easy to cast, but is very effective.
But basically all the magic skills are useful. Restoration and mysticism takes a long time to train, so you could have them as main skills if you don't feel like leveling up too fast. Destruction is also fairly hard to train. The easiest ones to train are alchemy and conjuration, so if you'd like to level up fast you should have those as main skills.
Anyway this the only way I've played Oblivion. If I went for a warrior type or any other I'd probably like that too, so others could probably give tips for other characters...