I'd kind of like it if they kept the current magical weapons and armor (and an added magical chainmail and magical leather armor set) as things which require both the Warfare research and the Magic research, and then added at least one of the following for magical armors:
1. A separate magic armor line - some form of enchanted clothing early on which gives small defense bonuses and some form or another of magical benefits, similar to the current Robe of the Aegis and the lootable mage robes for champions - this should not be as good as real armor is as far as physical defense goes for most items, and if they are as good (or better) it should come at a cost to the other enchantments, perhaps even a slight penalty.
2. A line of research specifically intended to give your troops antimagic defenses - things like spell and elemental resistance boosters. Elemental resistance boosters are kind of unnecessary right now, though, since most of the time I don't get attacked by something with an elemental attack (not counting air elementals and shrills), and the handful of elemental resistance boosters in the game currently can give you 50% to fire or ice with a cloak, or 25% to fire or ice with a ring, and you can have both rings and one cloak on any given unit.
3. Maybe further development of the trinket line of equipment. Perhaps the way to go for magical 'defense' is to enable units to act more frequently and have a slightly higher dodge chance (not much higher, though - I often feel like I'm hitting things too infrequently anyways)?
4. Add armor made from some of the creatures in the world. Rock Spider Plate Armor or Dragonscale Mail, anyone?
5. More variety in the cloaks. There are, I think, three of these in the game right now that are anything other than cosmetic (at least, that are available to trained units).
For weapons, I would like to see further development of the staff weapons. Perhaps add in some sort of ceremonial weapons (i.e., Crystal Daggers, Sacrificial Knives, Tridents of Burning, whatever), but these should be equivalent to the ones in the warfare tree rather than better.