Magic weapons generally fall into one of the enchanted elements (see char below). The higher the level the greater overall damage as long as the weapon has charges. The element type also becomes associated with the damage as well which may provide additional bonuses against some creatures. 

Magic weapons can also have an skill bonus attached to them for their corresponding weapon skill (ie a sword will give the bonus to the sword fighting skill). The following chart below describes this bonus:

Some weapons can also be etched with a spell. If a weapon is etched with a spell then while tha weapon is equipped as long as the equipper has the skill assciated with that spell, they can cast the spell without it being in their spell book and without having to pay the regent costs.