Okay, so how much of an advantage do Bretons get over other races, Imperials for example in terms of magic from the start, and for how long?

If I play as an Imperial mage, will they be as powerful as a Breton Mage at higher levels?

The only difference as far as i am aware is the special abilities they get, any character can be made into anything, if i wanted a warrior wood elf, i could make him/her

Edit: and they could be just as powerful as an orc warrior.

Yes.

The only difference is that "racial mages" get a minor bonus to magic skills at the start, while Altmer get 50 bonus Magicka points, IIRC.

Bretons have the advantage of having a 25% magic resist which suits any build, not just mages. Combined with Dragonskin, though, you'd make a great anit-mage.