Racing yourself is great for motivating you to push harder and riding a virtual route really helps relieve the boredom normally associated with using a turbo trainer.
I'm afraid the I-magic isn't very realistic. Despite the manufactures claims it struggles to replicate gradients much over 5% or low speeds. It doesn't really matter though. If you want a totally realistic ride then get a set of lights!
You'd be surprised. As far as resistance goes the I-magic isn't a weakling. Most turbo trainers struggle to offer a high level of resistance at low speeds. If you want more resistance then just select a higher gear or pedal a bit quicker.
To compensate for the lack of resistance the trainer often uses a virtual speed instead of the actual speed of your rear wheel. You never actually find yourself doing 25mph up a 25% slope but you don't find yourself in first gear straining to keep the cranks turning either.