I didn't think Discworld magic worked that differently from D20 magic. I don't think it would cost xp each time a wizard or witch cast a spell or anything like that. Wizards and Witches learn spells and then cast them. Spellcasting is possible because of the massive amount of magic that saturates the Discworld. I just have to find out if a spell burns itself out of the casters mind after it's cast, or if a wizard can learn a spell and then cast it as many times as they want. Some spells will have to be modified (polymorphs only last a short time, creatures being teleported must have a "counterweight", etc), but for the most part it wouldn't be that hard to alter. Of course, this is going off of the GURPS book, and the bits about magic in the novels themselves. If you got your information from someplace else please tell me where so I can check it out.
As for Sourcerers, there no way I'm letting someone play a sourcerer character. If I use one as an NPC I will only ever have one show up in the campaign, just for one adventure, and he would be VERY powerful.
Most Dwarven Battle Bread would be similar to regular weapons, except with a different hardness rating (then again, dwarven bread may have the same hardness as steel). Dwarves would even sharpen their bread to use them as daggers, swords, etc.