I touched a little on the way I want magic to work in the setting of BTR while talking about elves. But after reading a couple other blogs, I want to go into a little more depth on this subject.
There seem to be two major schools of thought regarding how magic and technology (specifically science) would interact.
1) Magic would supplant science & technology. Since spells can do wonderful things that medieval technology can't, everyone who wanted to do something cool would learn magic rather than science.
2) Magic would accelerate science & technology. Magic is an extra set of tools for discovery and experimentation.
So which option am I choosing? Both, really.
My current concept for elves fits rather closely to #1. They are highly proficient with magic, to the point where magic is their technology. But this doesn't mean medieval stasis. They have developed a starfaring culture and have colonies and outposts on several worlds. But they did it all using magic that could do what science can't or won't do easily. (For one thing, I'm thinking that they use stargates that are actually giant teleportation circles for FTL travel)
Humans fit in #2. Recall a few posts back that I used the word technomancer. While the Rifts setting does include Techno-Wizards, I'm actually thinking of something a bit different. Techno-Wizards seem oddly limited. Their main gimmick seems to be the creation of Techno-Wizard items, or converting technological devices to run on magical power.
That's cool and all, but they don't strike me as very techno or very wizard. While they can learn spells, these spells are reduced in effectiveness unless they are using them to power a device. Their techno side is limited as well, since they have a hard time picking up the skills that actually let them play with technology.
To me, a technomancer is a character that either uses their magic to do science or uses their science to do magic. Like casting a spell to detect radiation, or enchanting a Geiger counter to detect magical emanations. Maybe in later supplements, Techno-Wizards get something that is like this, but the main thing they seem to get in the core book is flying skateboards.