I like levitation power for mages. I was a major power abuser in Morrowind. I was the 100% chameleon, permanent effect levitation, constant heal clothes wearing wielder of sudden death.
Watching the triceratops creatures run in fear, then immediately turn around to attack, having forgotten that I am levitating, then return was quite amusing.
I found that guards always shot me full of arrows, so I used the permanent effect summon cheat to create meat-shields, but the guards insisted on shooting me, the invisible mage of doom.
It was incredibly difficult to fight melee opponents in Morrowind, as they kept running everywhere, too hard to aim and kill. It was also extremely difficult to kill strong magic AI, having to always hide behind a pillar from their perfectly-aimed-regardless-of-chameleon fireballs and frost spells was not cool.
On the note of view distance, all they have to implement is to create an annoying cloud that follows you around no matter where you are levitating to. Annoying yet perfect fix for levitation view distance problem for when you get too high up.
I agree that levitation should not be implemented like in Morrowind.
--Low level levitation should make you hover close to the ground. It is very well implemented in vampire games as a smoke that comes out of your mage's robes. In tight areas such as indoors, if you are using too strong of this spell, the smoke could choke you up, making you unable to maintain the spell longer. I personally hate the sound of my character running, the rasping breath reminds me of advlt content and I don't want people outside my room thinking I am watching an advlt movie.
--Mid level smoke hovering speed and height should be boostable, and power drain should be related to your encumbrance. If you weigh too much, no liftoff, ground control.
--High level smoke levitation should be unstable, resulting in failures with the usual Oblivion ragdoll physics making you fly a short distance like a rocket, then landing hard. Using levitation too strong indoors would result in getting hit on the head on the ceiling, which is usually rock or hard wood, resulting in a paralyzing stun and loss of health, not to mention falling to the ground.
--There should also be a levitation implemented similarly to in the cartoon "Ben 10" where the female hero creates glowing steps. Greater skill, more glowing steps, last longer.
Now to balance this with the other classes: First, similar skills:
--Your super strong warriors don't like heights. They often feel sick on tall horses, and thus, horses went out of style. Just messing with you. Everyone knows warriors are too muscular and heavy to fly, silly.
--Stealth characters should get a special cat suit that has webbing on the arms and legs, climb to the top of a tree or top of a roof or wall and jump off, gliding long distances on the wind.
--Acrobats should be able to jump really hard and literally bounce off of any surface, based on the direction of the surface this could vault you high into the air, or into a cart of cabbages.
Next, the counter-levitation effects:
--Large cities should have large defensive crystals that drain magic or limit maximum magic or magic strength to protect commoners. Mournhold already had levitation negation in effect for Morrowind.
--Special mage traps such as curiosity traps should exist in dungeons. You would see a shiny area, levitate up and see its a "ha ha svcker" easter egg, and trigger a trap, which stuns you and you fall all the way down, into a weak part of the floor which a warrior would never be aware of, into a pit of enemies, or spikes.
--Super strong warriors should be able to hide behind a rock or something and wait for the mage to come around the corner after you, then hit them with your huge axe dead in the face, or tear tree trunks out of the ground and swing them around to swat at mages.
--Stealth characters should be able to crawl under the thin film of smoke that the hover levitation creates, or hide perfectly in the shadow of the levitating steps right below the mage. They should also be able to throw smoke screen bombs, and skewer the mage in mid air with the sharp end of the grappling hook, swinging them to the ground.
--Of course acrobats should easily be able to out run and possibly jump onto objects to get high enough, and leap toward the mage.
A note should be made that if a mage is hovering pretty high, they probably won't be able to see you to attack you, unless you are stupidly standing out in the open, in which case you are asking to get hit by lightning.
ETC:
People have also said chameleon is overpowered. One way to implement this to get your 100% chameleon would be to have the obvious putrid looking smoke of chameleon to stink like rotten eggs. The stronger the chameleon, the more putrid the stink. Some people will not be aware of their sense of smell as much, such as a commoner. Many animals rely heavily on sense of smell, which would drastically reduce the overpoweredness of this spell.
Also, I would be GLAD to pay
$100 for this! But first, please give me your credit card information, mothers maiden name, and secret words, and deposit will be made shortly