My favourite 'undead' faction in a loooong time... The Drowning Doom, in Brutal Legend... That game was great fun, the characters interacted well and a good story (if short) was developed, with three awesome factions... XD
The Drowning Doom, basically a sort of undead faction, battled mainly through DEPRESSING their opponents!
The wiki of them is the following link
My favourite description has to be of the gravediggers, 'they fight in large numbers as this helps them to express their individuality'
This is another one of Tim Schafers games that did not disappoint, but never had as much popularity as it should have...
Of course this is all personal opinion...