Pointing at the spell book item brings up the magic menu. From here you can select spells to cast. If it's not already selected click on the 'magic' tab to show your magic spells. Below this there is a list of all the spells available. The colour of the spell name indicates if you can cast or not. If the name appears in black your magic level is not yet high enough, and you need to practice with the lower level spells before you can cast it. If the name appears in white your player is sufficiently good at magic, but you are not holding the required runes to cast the spell. If the name appears in yellow then you have everything you need, and the spell is ready for casting.

To cast the spell just click on the spell name, and then click on your desired target in the main game window. Some spells can only be cast on hostile monsters, other spells can only be cast on yourself, so experiment to see what targets are valid for each spell.