That's the idea. And as I wrote in my Formspring post, your lower level spells aren't unlimited. You will still temporarily lock out all spells of that level once you've cast enough of them.
Nice! The magic system sounds even better than D&D:S to me, it seems logical that higher level spells can't be spammed while lower level are easy to cast. Hopefully it changes with level too, so that lvl 3 spells first require preparation but when you're casting lvl 6 spells they are easy (or something like that).
This sounds awesome.