Hi Ken!
I looked through your rules and I like them! While I still will use the normal rules in play, I have now the right rules... ehm, guidelines for a story I plan to write. There are writers, who write only realistic stories and there are other, who write whatever looks appropriate. Obviously, a story using magic as a element can't be fully realistic, only look realistic, and for that I simply need not only nature's laws, but magic's laws and the correlation between the two. Applying the hit point-system would only result in fights, where at first the hit points are reduced and then the combatants die a quick death.
Yes, I could simple write want I want, but then it would be completely arbitrary like that: "The big rock starts to float 3 meters high, about 15 meters the path along, while it transforms to a big elephant. The suddenly existing animal trumpets loud, before it falls to the earths and crumbles to stones and dust." Following Murphy'S Law somewhat.

Okay, enough with the rant...
Some comments:
-The Critical Threat Range table: The entry "15-20" should be something like "Every other".
-An error in the Bypass Heavy Armor entry at the Critical Hit Effects: You wrote "medium armor" instead "heavy armor".
-"Apply your target’s damage reduction or energy resistance (if applicable) to the attack’s damage." Do I understand it right: If I have DR 10/magic, then any applicable damage will be reduced by 10 points?
-How do you handle hardness?
-What are the effects of Fast Healing and Regeneration?
-There aren't examples for every situation, you cover with your rules.
-In which product Mongoose used your rules?
-The storyteller system is used in Vampire: The Maskerade or Werewolf: The Apocalypse, for example.
I hope I didn't overlook that someone asked or mentioned anything above.