Let's look at the "turn undead" spell.

I buy a turn undead spell that turns them up to level 3. All well and good, but when I pass level 3 I have to buy a new one -- say up to level 9. When I pass level 9...

And so on. I end up with all these 100% useless spells in my inventory, because I'm too high level for them anymore. Plus I have to go through the hassle of buying new ones every few levels.

So. In Skyrim, will the spells become more powerful based on level? In other words, will a turn undead spell ALWAYS keep working no matter what level we are? Will a fireball spell increase in damage as we level up? Or do we keep on having to buy a new more powerful one?

From what I understand spells don't have ranks this time, so I guess they level with you, I saw videos of spells like the flamethrower which just does as much damage for as long as you can keep it on the enemy. I don't think spells have a set damage value this time like they did in oblivion, they can get more powerful or weaker depending how well you can aim or how long you can keep them going.

If they do, I hope they took a careful look at the balancing.
I dont want to use half my magicka to dispatch a rat at level 30.

I think the effects improve with every rank in your magic skill.

E.g, Healing spell at 25 restoration heals 10 health every second. At 75 restoration, heals 50 health every second. And of course the Magicka drain decreases too.

Obviously no one has confirmed this, but whatever. Just speculating.

Spell power is based on holding down the button for longer before releasing so for a rat hold down briefly, for a wolf a little more and so on. As you level you will have more mana and I assume will use it more efficiently.