This is a great game. I just discovered it here in 2014 as I was waiting for AoW3 (which I haven't bought yet). AoW: SM is really a masterpiece of turn-based, role-playing fantasy gaming. It does have a few flaws, but overall it is probably the best turn-based strategy game I've played since Master of Orion (which is also excellent).
Gameplay: AoW:SM is focused on building an empire and exploring/conquering a map, while making your wizard more powerful as a spell caster. You get to choose your wizard at the beginning of each match, along with your race (there are 15!). Each wizard can specialize in 6 different areas of magic, as well as be a bit of a hybrid. You can also specify the size of the map, how many levels it will have (that is surface, underground, and Shadow World), and even generate random maps. Sadly and somewhat inexplicably, you cannot choose the AI wizards or races that you compete against in a match. They are randomly chosen on random maps, or preset on fixed scenario maps. The gameplay itself is based on turns, with you doing actions such as moving troops, researching spells, fighting, and so forth each day (or turn). Fights can either be auto-resolved or fought manually, which means that you go to a zoomed-in version of the map and fight your opponent. This is usually where spells come into play. Overall, the combat is done well and can be intense. The AI is pretty decent and can even surprise you on occasion. There is a lengthy single-player campaign that comes with the game. I found it a mixed bag. On the one hand, it is a good tutorial for learning the game, and there are some interesting maps. However, the difficulty of the campaign is very uneven, with some easy maps that are just set-piece battles and some crazy hard ones that you'll have to restart over and over again due to overpowered AI opponents. By the second half of the campaign, missions are so tedious and difficult (even on the lower difficulty settings) that only the most hard-core players are likely to stick with it, without cheating. Thankfully, there are a number of stand-alone scenarios that come with the game that are better than the campaign, and you can play random maps. I personally would recommend fiddling with the map editor that comes with the game. You can build your own maps, create new wizards and heroes, change unit stats, and do other things to your heart's content. Overall, it's just a well-done game that takes advantage of the modding possibilities of the PC.
Graphics & Audio: The game looks decent enough, considering that it's over 10 years old. Spell effects can be somewhat impressive, but don't expect a screen resolution higher than 1280x1024. Still, the graphics are all serviceable. The audio is quite good, especially the music. There are not a lot of voices in-game (as opposed to in the pre-mission introductions), but the sound effects are immersive enough.
Bottom line: Superb game that really delivers a rich, diverse gaming experience for a turn-based, fantasy game. It has some good role-playing elements--your units and heroes level up--that make you care about your progress. The flaws are mostly minor, largely having to do with the lackluster campaign that gets painfully difficult over time. Otherwise, a highly rewarding game.
Pros:
+Great concept and execution
+Customization options
+Roleplaying and leveling up
+Strong city-building mechanics
+Vast array of races, spells, wizards, etc.
+Modding possibilities
Cons:
-Mediocre campaign
-Random-map generator tends to spam mountains
-Can't select AI opponents on random maps