One group that I've been playing with uses the line of logic that if the spell is personal or a melee attack (Inflict Wounds), there's no AoO

It's a house rule, and everyone has them.

FWIW, I don't like it. IMC I even made Casting Defensively harder (can't do it without the feat.)

If the DM was presenting it as a 'House Rule' I'd be okay with it. (Well, unhappy, but relatively okay).

However, he honestly believes that it is standard, by-the-book DnD.

I realived the original post was unclear.

The AoO from making a ranged attack with a spell is regardless of a Cast Defensively check. Essentially, if the spell is a personal spell or a melee attack, you can avoid the AoO by making a concetration check. if the spell is a ranged spell, there is nothing you can do to avoid an AoO.

Casting a spell, even one to make a ranged touch attack, is a "Cast A Spell" type of Standard Action, not an Attack action, so does not provoke an AoO for being "Attack (ranged)". If it was also somehow a second type of action, players would use Fighting Defensively while casting ranged touch attacks (in my experience, briefly thinking that is legal, and that you couldn't be the first person to think of it, is what causes one to read the AoO table more carefully).

From the hypertext d20:

"Generally, if you cast a spell, you provoke attacks of opportunity from threatening enemies. If you take damage from an attack of opportunity, you must make a Concentration check (DC 10 + points of damage taken + spell level) or lose the spell. Spells that require only a free action to cast don’t provoke attacks of opportunity.

Casting on the Defensive
Casting a spell while on the defensive does not provoke an attack of opportunity. It does, however, require a Concentration check (DC 15 + spell level) to pull off. Failure means that you lose the spell. "

So casting a spell invokes an attack of opportunity to cast unless it is cast defensively.

Casting a spell, even a ranged spell is not making a ranged attack, so it does not incur an attack of opportunity. For example, magic missle causes darts to fly from your hand unnerringly into an opponent. Since that is all the spell, it is not actually a ranged attack. Even spells requiring the caster to make a ranged attack roll (usually a ranged touch attack) aren't ranged attacks.

If the caster makes his concentration check to cast defensively, there is no attack of opportunity. Period.

Even spells requiring the caster to make a ranged attack roll (usually a ranged touch attack) aren't ranged attacks.

I chose my words carefully in my reply above, because spells like Scorching Ray *are* ranged attacks (and so casting them while 2nd-level-Invisible makes you visible), but they are just not generated by an "Attack (ranged)" standard action, so don't provoke an AoO (at least not for for that reason) or benefit from Fighting Defensively.

Along with "level", "defensively" and "attack" are woefully overloaded.

http://www.d20srd.org/srd/combat/actionsInCombat.htm

I was going to say that they were wrong, but looking at this again I'm not so sure.
It looks like a ranged attack provokes an AOO (I'm sure it used to be reloading, so firing a preloaded Xbow, for example, didn't) so for any spell where a ranged attack roll is made you could argue that they're correct (rays etc). I can't see how it applies to fireball etc though, and I think that is a mis-application.

Thinking of it logically, there would be no reason to cast defensively if doing so would still draw an AoO for being considered a ranged attack.

It's been my experience, if a caster is casting a spell (personal, range touch, or otherwise), it provokes an AoO. Unless the spell is Quickened or instant (due to Contingency, if you use spells from 2E), casting provokes AoO's.
As to your other question: Normally activating a magical item does not Provoke AoO's, but casting from a scroll or activating a wand should. My reasoning is that these take a moment or two of time (in addition to needing to aim with a wand), and therefore you subject yourself to an AoO.
Casting defensively is beneficial. Regardless of the outcome of the feat, the caster may still receive more than one AoO, from either being flanked by two or more characters, or from someone with the feat that allows for additional AoO's due to high Dexterity (my books are not on hand, and I can't remember the name).
But then, these are just my own rules. Hope it helps though.