torchbearer is the guy with the fire staff, i think. do you have the enchantment tech that unlocks fire staffs (and other items) ?

Sooo... you are absolutely right about their being a problem. When they set up the two magic staff tracks they didn't update the unit upgrade stats. That is

        <EquipmentUpgradeDef>
            <EquipmentSlot>Weapon</EquipmentSlot>
            <WeaponUpgradeType>MagicStaff</WeaponUpgradeType>
            <EquipmentSlot>Defense</EquipmentSlot>
            <SelectionCriteria>MaximizeSum</SelectionCriteria>
            <ComparisonAttribute>UnitStat_Attack_Fire</ComparisonAttribute>
        </EquipmentUpgradeDef>

when this should say

        <EquipmentUpgradeDef>
             <EquipmentSlot>Weapon</EquipmentSlot>
             <WeaponUpgradeType>FireStaff</WeaponUpgradeType>
             <EquipmentSlot>Defense</EquipmentSlot>
             <SelectionCriteria>MaximizeSum</SelectionCriteria>
            <ComparisonAttribute>UnitStat_Attack_Fire</ComparisonAttribute>
         </EquipmentUpgradeDef>

This happens to all the units that utilize the magic staffs. For me to distribute this fix I'd have to post the coreUnits.xml, but that is not gonna be pleasant.

I guess my answer is late, for parrottmath allready found the problem, but anyway: Yes, "Incidation staff" is researched, no can't build mages either.