The only thing that I can see, right off the bat (that other people haven't addressed) is that I think we should get rid of the level requirements for casting the words.
Keep the costs, that's fine, and feel free to keep the levels there for learning the word.
But if I can make spell cheap enough to fit into a first level slot, although the effects might be 2nd level... it's just kinda disappointing. This will fix the problems that people are having with the barrier spells too.
Also: I don't know if it's already planned, but I would add a couple more interesting effect words (like maybe rings? or four 10-ft squares) I don't know. The barriers always being lines is limiting. (Or at least make it so they don't have to start directly from the caster's square.)
The damage scale appears to be fine. Most of these spells, however, seem to fail horribly when up against a rogue. Almost every spell is reflex/half. Which of course, evasion eats right through. I'm not necessarily saying add more No Save spells, but is there anyway around this?
Finally, I know that this is no where close to all of the words that are going to be released, but I would like to see words that can do things that legacy spells CANNOT normally do. And I don't mean simply weird damage types, just new effects.
And I see a lot people saying that wizards are mostly going to ignore this, I primarily play wizard and I think it's very interesting (I can see an almost scientific-flavored approach to this type of casting).
Quick question: how do classes that allow you to learn spells from other spell lists play into this magic system? I'm assuming you get to learn an effect word that is normally barred to your class, but I'm unclear.
I will second the opinion that the cost allotments for each casting level might need to be raised just a little bit.
I'll continue to look at the system, just wanted to throw in my two cents so far.
P.S. I'd like to see some of the other classes getting play in these too (I don't recall seeing any of the APG classes getting any love).