You can choose whether to fight Magus or have him join you. Aside from slightly changing the Ending, there's no real benefit to defeating him—he even comes equipped with the Amulet you'd win by fighting. Note that if you do fight, and Frog is in the party, the fight will be one-on-one. This can be a fairly difficult fight to win.
After this fight, you are free to use the Epoch to travel wherever you like. A number of sidequests appear at this time, or you can try to save Crono. You can even go fight Lavos right away. It's up to you.