This is one of the best "formulaic" fantasy books written. As a "hero-gets-transported-to-a-fantasy-realm" book, it is a common premise. Since the hero incidentally has some great power of his own, also fairly common in escapist fantasy. This is not EPIC fantasy. The world is not so foreign that we cannot recognise elements of our own world in it... that is the point here. By making many of the elements VERY common, and, in fact, archaic, we readers already have a good starting point. We get dragons, witches, dark powers, and the princess in distress. Sounds good to me!
The main distinction here is that the protagonist is a career student with no real direction for his studies... a true gen-x'er. He is transported to a realm that he cannot take very seriously, until his life is threatened. What starts off as an ironic joke puts him at the center of a power struggle that has both political and religious powers coming to bear. Magic is real, and basic physical laws don't seem to work quite right. Religion is less ambiguous, there is no grey area. Much of the hero's time is spent trying to understand the new rules, and almost a reluctance to believe what he seems to already know.
The story of the power struggle is incidental to the lead character's need to understand and accept both his newfound role as a true power in the coming struggle, and his true value as a friend to those around him, his self worth. In short "Her Majesty's Wizard" is a Love story, a Wizard tale, a Growing-Up story, and a Good vs Evil tale... with happy and sad endings.
I can say without a doubt that this is a great book, whether or not one continues further with the series. Stasheff's other work, "The Warlock in Spite of Himself", is also a great read with a more Science-Fantasy bent... also the start of a series, but a good stand-alone as well.