I've coded the basic functionality for spells and power ups, and built a rough interface so you can try a couple. The basic idea is that each racer chooses three spells to prepare before the race. The spells have a fair amount of customization, just like you'll be able to tune the components of your racer.
Each spell requires a set number of motes to cast- you get motes by flying through the clouds spread throughout the course. Right now you toggle through your spells with the "n" and "m" keys,and you cast the spell with the space bar. Only two spells have any graphic component yet- there's a shield spell and a lightning spell, but there are plenty more to come.
The interface needs another pass to get it right- the icons are too small, and the dial isn't as clear as it needs to be, but it's a start!