As always, so much depends on the definition of terms involved, as well as in the personal experience of the definer.
I agree with bruagach's discussion on pantheism and panentheism, with the added statement that we find few examples of these philosophies in a pure or absolute form. Even in modern Christianity, God is generally considered to be transcendent, but most apprehensions of Him--particularly in the more mystical and personal versions--acknowledge Him as immanent as well, as in "Christ dwelling within me."
My experience runs along these lines: I am a witch, but I also make frequent use of ceremonial magic in my own practice, and my daughter and future son-in-law are members of the O.T.O., a ceremonial magic group in the Golden Dawn tradition.
In my experience, and in VERY SIMPLISTIC TERMS, ceremonial magicians practice what they call "high magic" (often spelled "magick"), which involves, among other things, taking authority over spirit forces--angels, demons, what-have-you--by virtue of the power of certain formulae, including various tetragrammatons (four-letter names of God). Witches practice "low magic" or "natural magic," which doesn't seek to dominate spiritual forces, but, rather, to work WITH the spirits of nature, the elements, and so on. While these are not absolute definitions in any sense, they do convey something of the gulf between the two traditions. When I'm teaching baby witchlets, I joke that the ceremonialists are VERY careful to get everything right, that if they mispronounce a word the demon jumps into their circle and eats them; witches, on the other hand, prefer to work with the demons instead of presuming to boss them around. Again, these are monstrous oversimplifications, and used for humorous effect.
Bruagach is correct about the "Great Work" and its implications. "Conversation with the Holy Guardian Angel" is, among other things, a path to self-knowledge and, therefore, to magical control. In fact, every magical tradition with which I am familiar--including ceremonial high magic, several flavors of witchcraft, shamanism, druidism, and elemental magic--all emphasize the necessity of the magician or witch working to perfect him or herself first, clearing up the blockages and issues and emotional problems that hinder him or her before attempting to wield magic in the world outside. Further, most traditions emphasize that the real work takes place within, in personal improvement, not in rewriting the world outside. In practice, something like a quick I-need-money-for-the-rent spell is a LOT easier to perform successfully than is the editing of one's own psyche! Besides, the self-improvement, self-evidently, is an ongoing process carried out across this and many more lifetimes.
That, in any case, is how I understand high and low magic.
In a recent discussion with my future son-in-law, who is a priest within the O.T.O., I asked him about my perception of ordering demons around. I didn't begrudge him the fun, but I didn't care for the idea myself. It seems arrogant, somehow.
His reply gave me something to think about. If the "demons" are, in fact, NOT the fallen angels of Christian mythology, but dark or injured aspects of our own psyches, then we can imagine how commanding a demon to appear and do our will is not so much ordering an angelic being around as it is taking a very firm hand with our own subconscious mind. And in this lies a lot of the true power of all magical work.
My take on the thread question is this. The words "magical" and "mystical" each can be slippery, and mean different things to different people. For me, magic can be a mystical practice, and the two are NOT mutually exclusive. I disagree with Underwood's thesis that "mystic" exclusively refers to union with the divine. I also disagree that magic is relegated solely to selfish and therefore to bad ends.
Nor can I agree that the one is good while the other is bad. I feel that taking power over other sentient beings, whether in this world or another, that exercising that power over others through domination and control, is ethically questionable at best, and presumptual arrogance bordering on black magic at worst. The ethics of magical power, as in most things, depend on what you do with that power, not the power itself. Seeking to unite with the Divine, however we picture it, I see as equivalent to seeking to improve the self and, so long as none are harmed, represents a productive and therefore "good" path.
But--a quick aside, here. It's fairly well known that Adolph Hitler was a thoroughgoing mystic, and that he was deeply involved in mystical traditions involving Aryan brotherhoods and Germanic descent from a "pure" Atlantean race. He was not a magician, in that he did not practice (so far as I know) magic himself, but his mystical leanings and experiences led him to formulate the basic policies of the Nazi party and to expect victory in the European war.
At the same time, it is fairly well known that a group of witches in northern England practiced an involved spellworking aimed at preventing Hitler from invading Britain. How was Hitler's mysticism "good," in this case, and the witches' magic, which WAS employed for essentially selfish reasons, "bad?"
The whole spirit-matter issue goes back at LEAST as far as Aristotle, who passed on his notions of spirit=good, matter=bad to the Christians, and, similarly, various Eastern traditions have long held that we are bound to the wheel of incarnation in matter and that this is something we must seek to escape, generally by suppressing or transcending ego and desire. Most witches see importance in both spirit AND body, and celebrate the glorious wonder of the union of the two. [One reason for our love of the Great Rite!] For me, this is one of the key distinctions between Christianity and modern witchcraft: Christians see the physical world as fallen and lost in sin, that death itself entered the world through sin, and that this world and all people are inherently broken and imperfect for that reason; witches see the world as a beautiful expression of Deity's creative and loving aspect, and see the Divine within all of creation . . . including ourselves.
Or so it seems to me! I agree--a wonderful discussion topic!