The Psionics rules published in AD&D (both 1st and 2nd) are almost completely compartmentalized and set apart from the rules covering magic and spell-usage, presumably in order to keep them an optional element in the game. The "mechanical distance" between these sub-systems suggests by way of analogy that the inner-workings of the metaphysics of the campaign setting itself also divide Magic and Psionics into distinct realms governed by different pseudo-scientific laws as well as operating through completely unrelated supernatural mediums.
This scenario is illustrated by Fig. a below.
Fig. b represents my current approach to the relationship between these two phenomena. The core of psionic and magical power is identical -- each are expressions of the same ur-force, though sometimes covering widely different areas. The blending can even be taken further -- elements of the magic-user's repertoire might be converted to psionic displines, eg. astral travel, telepathy, telekinesis, illusion, etc. I'm considering building a psionic system that would be completely magical -- a subset of abilities available to any character but especially magic-users. The goal would be to make Psi and Magic complimentary -- no longer competing but growing from the same source.