Enchantment Gems

'Enchantment gemstones (or engems for short) are tempered minerals or crystals capable of containing residual essent and elemental magic.'

See Henrik's page here for fluff.

Spell Gems
Spell Engems have extremely varied uses, and can be likened most of all to Wands with a vastly expanded repertoire. Each individual gem has one purpose, but most are useable more than once before becoming exhausted, and once exhausted they can be recharged with relative ease.

In terms of thier place in the game; assume that all magical items could be replaced by an Engem variant - a wand is simply an engem on a specially treated rod, a Flaming sword is a masterwork longsword with a fire engem socketed into the crosspiece, an amulet that bestows damage reduction 5/piercing might hold an earth engem at it's center.

This leads me neatly onto the next concept I'd like to introduce, one that many gamers will be familiar with:

Socketing
Compared to traditional Pathfinder and DnD, Engems give inhabitants of Equestria extreme levels of flexibility when it comes to magic items. One of the problems with this is that there's nothing stopping a player taking a sword and sticking every engem under the sun to it. To make things a little bit more sensible, I'd introduce the concept of Sockets.

The basic idea is simple, adding another step between a mundane object and an artifact. Normally, you could have normal items, Masterwork items, and then Magic items.

In this case, you have Normal items, Masterwork (Zero-socket) items, and then levels named after the number of sockets - a one-socket, two-socket, three-socket, and so forth.

Engems of increased power take up more sockets, and the number of sockets limits the number of different engems that can be in place. Changing engems around should be possible, though certainly too difficult or time-consuming to be done on short notice (ie, in combat).

Items with a single socket shouldn't be hard to get, but they will get exponentially more pricey as the number of sockets increases. Think of it like the magic weapon creation system pricing from Pathfinder and 3.5. A socketed weapon alone has no advantage in the immediate, however that extreme flexibility will be incredibly valuable to higher-level characters.

Source/Oasis Gems
These will be most akin to, at thier most basic, Pearls of Power. Depending on how powerful the gem is, it will contain a number of spell points that can be 'absorbed' and used for any purpose - casting spells, enabling metamagic, powering up spells and so on. Due to thier unstable nature, I'd add the caveat that the energy must be used within 1-2 rounds or it dissipates, but also that, with a successful check of some sort (perhaps Spellcraft), the energy could be used to power a spell past a character's normal limits.