How can you tell if a weapon deals magical damage or not?
Magical Damage?
Go pound on a dwarf, or an invoker with mana shield, or an ogre, or arcturian in the tainted valley or.....
General rule of thumb is that if it isnt doing phisical damage, its magical.
You generaly need a magical weapon for 2 things.
-Hitting harder due to lower magic AC on oponents.
-By passing Giants resistence and hitting Ogres Vulnerability.
Actual "magic" verbe is rare, an i can only recall one weapon that does it.And weapons that actualy do "Real Magic" damage are rarer.
Fiery and Icy bites are not physical so are magic.
Botom line:
You have Bash, Slash and Pierce that are Phisical.
Then you have magic that can be "Real Magic" or non physical as Wrath and Divine Power or Kiss of Death or Thelicanesis.
Pitty there isnt a Giants Bane weapon, dealing "Mental" damage.
There is something that does mental damage last I checked. 
So what is the advantage of having a non-physical damage weapon as opposed to a physical damage weapon other than being good against giants?
Hitting vulns, lower magical ac usualy, some spells only resist physical damage, it looks cooler, etc.
And by the same token, there are times too when you don't want to be using magical weapons. Magic resistant races, spells that protect against magic, and so on.
Dey
Don't fight an invoker past 30 with a magic weapon. Don't fight a dwarf, duergar, or halfling with a magic weapon. Don't fight a level 50 battlemage with a physical weapon.
Well, dont fight a dwarf or duergar with a magic weapon, unless its a watery magic weapon.
And honestly, since finding out how freaking easy it is to get those, I tend to waver a bit on playing them.
Most of those weapons are either disarmable or destoryable so the only duergar/dwarf that would have a problem would be....tadda....clerics and we sure as heck don't need more of them.