@counter fireball: Yeah counter fireball on a boss is kind of a hard counter to fireball usage. Yes, you can use fireballs for the finishing blow without retaliation. Which is good after mana leak and with a precast slow you can still do the 2 fireballs + physical hits routine. But both are kind of special cases (just killed namtar with a dwarven sorcerer and finished all of his enraged forms with a final fireball, but that's all of the occurences for me) and the latter is usualy not worth it for mana and inventory reasons.
@PeaceChaser: The effect still dispells after any enemy is hit. I really don't see much use, but maybe i've overlooked something.
Also, physical damage usually outclasses fireball at any given level against non phys-resist monsters.
That's kind of true, because with humans/orcs and tri-swords we can make it so and it is a very effective and easy way to play the game. In general however two fireballs outclass one physical attack and that is usually all you can do to a high level enemy. Ok, once we add sidestep you suddenly have three hits and fireballs lose hard... If sufficient for the kill i also prefer my fireballs against weakening enemies and the like

Overall i have to agree that sidestep is still more often useful and usually MUCH more useful given the right class race combo.
@q3: That was exactly what i thought, when i encountered counter fireball the first time. I was quite dazzled when i took so much damage and my attack dropped :/ I agree that a fireball duel would be much fairer; imho even much cooler fluff wise.