Export: OK, thanks. Would you say that a balanced character is therefore weaker than a character taking to either extreme?
Usually. A balanced character will not be able to use tech or magic very effectively. You will find, for instance, that the unlocking spell won't succeed very often unless you're more geared toward a magical track. However, there are definitely character builds that are neither tech-aligned nor magic-aligned that are still quite effective; for example a straight melee fighter. In my opinion though, it's more fun to pick either tech or magic because then you can actually use the relevant skills effectively. A pure fighter can get a little boring.
Export: I was considering levelling lockpicking as I assumed that a levelled up lockpicking skill would be better than a lockpicking spell if I'm not going to max out the magic alignment, but will the lockpicking skill be similarly underpowered if I don't go along the tech route fully?
Not exactly... each time you put a point into lockpicking, you will shift your affinity towards tech and away from magic. Your actual lockpicking ability, however, will depend entirely on the level of your lockpicking skill, whether you've gotten any of the training perks for the skill (apprentice, expert, master) and how good your lockpicks are. So basically, it will let you pick locks at the expense of some magical affinity. Low magical affinity means that you are not only bad at spells, but enchanted items don't really work for you. If you find a magical sword, for example, you will see a percentage number that tells you what percent of the enchantment is actually effective... this number will be low and quite possibly zero for tech-aligned characters. So if the enchantment says 50 fire damage, if you're only running at 10% you'll only get 5 fire damage. Also, magic cast ON you is not very effective either. This is good, when it's an attack spell aimed at you, but it's bad when someone is trying to heal you magically and it doesn't work.
Going the magical route, higher magical affinity will make the spell succeed more often. You gain magical affinity by putting points into magic skills, i.e. into spells. I don't remember if having a higher level in the same magic SCHOOL will help (i.e. whatever category contains the unlocking spell, if you get more spells in that same category, I'm not sure if that also makes the unlock spell better). Magically aligned characters will get better benefits from enchanted items and spells will work better when cast on them (both damaging spells and healing spells). There are also tech items in the game, usually weapons and armor that are somehow enhanced technologically. Magically-aligned characters will have trouble with these items, as there will be an additional chance of critical failures when using them. You can see how high this additional chance is by examining the item.
Export: I also read that there are various pluses to each type. Apparently while it's a lot noisier, the magic spell can't jam locks. I also read about certain magical locks only being unlockable with the spell, but that wasn't confirmed. It seems like the skill is best used for burglary whereas the spell is better used in dungeons.
That is probably true. But as I explained above, it's probably easiest to pick one or the other for your character, depending on whether you want to be tech or magic... otherwise neither will work very well. The general consensus is that magically-aligned characters are easier to play, but many people find tech characters more fun despite the added difficulty.
Remember, Arcanum is designed to be played many times, trying many different characters, as they play quite differently and the game reacts differently depending on your choices. So go ahead and pick something for this run-through, then come back later and try the other option with your next character.
NOTE: It might be possible to max out lockpicking skill but still end up with a magically-aligned character overall by spending lots of character points on spells. You probably won't get your magical affinity quite as high as a pure magic character but it could still be feasible... I haven't tried it myself. If you are able to do this, then both the lockpicking skill and the unlocking spell would work well, I think. I don't think there's any extra failure chance to the lockpicking skill due to magical affinity, but others can correct me if this is wrong.