Imho you should be able to counter almost every spell with a similar spell of an opposite school. For example if my enemy uses a fire spell, I could use a ice spell to avoid some or all of it effects.
It'd be neat if that would just be an option of how to use a spell. For example, I could choose to target an enemy unit with my ice spell, or I could choose to target my opponent's incoming fire spell. Sometimes you could even be able to counter a spell with the same spell. The problem with any system like this is that it requires prior notice to what the opponent is going to cast - but how can we make it so both casters can see what the other is planning to cast and both react? The result would be chaotic unless we can think of a balanced mechanic - and one that doesn't require twitch reflexes.
Because combat isn't strictly turn-based (it's "continuous time turns" whatever that means), it might not be such a big problem. I think it would be really neat for channelers to be able to sense what an opponent is about to cast, and be able to try to do something about it. More than just casting an opposite spell, but by trying to actually take control over or mess up the enemy's spell. Actually, I just thought of something cool:
One way to counteract a spell should be to cast the same same spell, targeted at the enemy spell itself. The result of this wouldn't be "Player A casts fireball. Player B casts fireball at Player A's fireball. They collide in midair and annihlate each other." Instead, it should be, "Player A casts fireball. Player B casts fireball at Player A's fireball. Player B has a chance to cause Player A's fireball to fizzle, and a smaller chance to take control over Player A's fireball."
This way if I am a master of all things lightning, and a rookie by comparison tries to cast chain lightning on my troops, I should be able to easily cause his chain lightning to fizzle, and have a good chance of being able to redirect it onto his own troops. The overall power of the channeler should be taken into consideration as well, though: an average channeler's high level spell shouldn't have an advantage over a much stronger channeler's lower level spell.
If you don't know the spell being used against you, other spells should be able to act as counterspells without the possibility of redirection. For example, if your enemy is casting chain lightning and your channeler doesn't know that spell, you could still cast a defensive spell like "Ice Wall" at the chain lightning spell, weakening or fizzling the lightning spell depending on various factors. Using defensive combat spells should be more effective as counterspells than using offensive spells. This would also make defensive spells more useful - most games suffer from defensive spells not being worth using.
The biggest reason why I want a system like this is because it would make magic feel epic. Being able to actually fight against opponents' magic with your own would be so cool, and being able to be creative about how to do it would be even more awesome.
Edit: Another reason why I system like this would be cool is it would make battles differ based on who you're fighting.
I also thought of another thing: some spell costs and effects should be variable. A good example is a spell like Ice Wall. In pretty much every game with a spell of this sort, it goes something like the following:
Level 1: Creates a 3 tile wall of ice with 100 hp, costs 10 mana
Level 2: Creates a 4 tile wall of ice with 150 hp, costs 15 mana
Level 3: Creates a 5 tile wall of ice with 200 hp, costs 20 mana
etc.
What I'd like to see is those numbers be maximums. I want the player to be able to draw the wall of ice on the battlefield in whatever shape we want. If I have level 2 Ice Wall, I want to be able to make a square wall - double the thickness (and thus any enemy would have to break through 2 of the tiles to get through) but half the width. Or if I have a higher level Ice Wall I want to be able to surround units, etc. The mana cost for a spell like this should be on a per tile basis. This could also work for spells like fireball (can change the area of effect). If you really want to go deep you could even be able to trade one aspect for another. Example: You have Level 2 Ice Wall but badly need one extra tile of ice? Fine, but each tile is only going to have the hp of a Level 1 wall.
I know a lot of people are more concerned about the 4X aspects of the game, but I think including an involved combat system with a good auto-resolver would bring the game to a whole new level. People who don't really care about the combat can auto-resolve. People like me who have at least as much fun with that aspect of the game as they do with the traditional 4X aspects can have our fun, too 
