How do you guys think magic and sorcery works in the world of FFVIII?

The consensus seems to say that sorceresses are able to use magic innately, but regular humans can only use magic when they have Drawn it from a monster or draw point. However, there seems to be some kind of threshold, as Rinoa and Edea still use only spells they have Drawn until they reach a Limit Break. Does this indicate that a sorceress must be endangered or injured in order to access her powers? What about Ultimecia's time compression abilities?

Well...I don't know if they must be injured to access their powers but I recall that Edea uses some sort of magic blast for her normal attack command(eventhough it is affected by strenght). And I belive sorceresses have special magic abilities that can't be drawn...such as Ultimecia's Hell's Judgement and that spell where she crashes 4 planets into your party.

Yep, this is pretty much a big fanwank thread, as I don't recall there being a real heavy explanation in the game.

I wouldn't say so. Remember, by the time Edea joins your party, her powers have already been passed down unknowingly to Rinoa. Naturally, she would also have lost her ability to use Magic naturally and would need to Junction Guardian Forces in order to cast any spells just like everyone else. We saw her raise a protective shield to stop Irvine's bullet during the assassination attempt, not to mention her primary method of attacking in both battles against her is Magic. All in all, the developers seemed to want us to know that sorceresses can use Magic without first Drawing it from a monster. As for Rinoa...remember, when we get to use her on Disc Three, she's only been conscious as a sorceress for...what, thirty minutes? I'm willing to bet that a sorceress's magical capabilities are developed over time, so naturally, Rinoa wouldn't be able to use hers right away.

this may seem dumb, but being as she was just a normal person in the past, like when she ran the orphanage as shown in the flashback when you visit trabia garden on disk 2, that Edea's power to cast infinte spells came from her being possesed by Ultimeca?

But notice that she does have a non-Drawn magical limit break (which is the same spell she used to injure Squall at the end of Disc 1).

Also, about Rinoa and her use of magic... one of all Final Fantasy's biggest triumphs/plotholes (depending on how you want to look at it) is the ambiguous flow of time. The events of the story can often only be recorded in relation to one another and a true chronology is hard to piece together considering sidequests and whatnot. Therefore, it can't be said how long Rinoa has her powers throughout Disc 3 until the end of the game.

That would actually be a plausible theory, except that it's stated very clearly that sorceresses are capable of using Magic naturally. Not to mention sorceresses are feared for their allegedly great and terrible power in the FFVIII Universe. If a sorceress could only use Magic under very specific circumstances, then she really isn't anything to be feared, if you ask me. Besides, Edea stopped Irvine's bullet with a magical shield. What's more, she cast that spell much faster than a normal human could even react. In fact, over the course of the game, Edea shows that she's more than capable of using magic. A few examples include paralyzing Quistis, phasing through the floor, and the icicle she used to impale Squall. Yet, at the same time, nobody ever makes any mention of Edea having a Guardian Force Junctioned to her. The only explaination we're given is "She is a sorceress, so therefor she can use magic."

In any case, there have only been two instances where a sorceress has needed to draw Magic to cast it; Rinoa and Edea when she joins your party. However, what most people seem to forget is that Edea was no longer a sorceress when she actually joins up with you. As I said, her powers had already been passed down to Rinoa at the end of Disc 2. As for her, that could easily be attributed to the fact that she can't control her powers yet. Again, she'd only been a sorceress for a couple of days at most. I doubt Magic is easy to master, especially when you're not enhanced by a GF. This is evidenced by the new Limit Break she gets, which lets her cast Magic she doesn't have in stock- randomly. Perhaps Square made it random to show that Rinoa doesn't know how to control her Sorceress Magic yet?

Plus, every other time we've seen a sorceress in battle- Adel, Edea, and Ultimecia- they've all shown themselves to be more than capable of casting Magic even when their situation is less than desperate. Considering Square stated numerous times within the game itself that sorceresses can use Magic without Junctioning a GF, I think it's fairly obvious that they can do just that.

It's slightly ambiguous where Edea transfers her powers, however. It could have occurred at the end of Disc 2, but could also have occurred while the group was traveling the Salt Flats or in Esthar. Also, during her time with the group, Edea does use undrawn magic in the form of her normal attack as well as her limit break.

One possibility which fits with your idea is that Edea has already passed her powers to Rinoa at the end of Disc 2, but retains some residually. Thus, she needs to draw most of her magic, but is able to attack and limit break with undrawn magic.

Another possibility is that Edea does not pass her powers to Rinoa until just before the Lunar Base. The problem with this theory is that Edea still shows undrawn powers after Rinoa is sent up.

Yet another possibility: Edea as herself, and Rinoa as herself are generally weak sorceresses because they didn't have time or never needed to practice their powers. Sorceresses only get strong powers by exercising magic skills; this explains Edea's reduction in magical power, as she only exhibits her super heightened capabilities when possessed by Ultimecia (who certainly has been honing her skills).