Undead

Throughout the world, and particularly on the island of Beluaterra there are appearances of two types of non human characters, Monsters and Undead.

Both these types can be very difficult to battle as they will always fight, and always stay and fight to the last.

(Hmm....undeads always fight to the last, but it is my belief that monsters do know what fear is and will retreat if odds are against them, anyone can confirm this?)

They have absolutely no fear, so they will not retreat or withdraw like your troops may do so.
But they also have no brains and no strategy, and always perform a frontal attack. Well placed archers can reduce their numbers considerably before they engage your infantry.

Undead

Undead tend to spring up on random occasions, if left to their own devices they will kill the peasants who will then become undead, and move onto other regions.

Some tips for making your own undead here: To Create Life

Monsters

Monsters have higher CS per unit, but still may be underrated, best to have a least twice the CS in battle. They will kill peasants and terrorize the region, but don't seem to mutiply as such.

Some notes by adventurer Geruvegan Mortis on Monsters and Undead: Notes on Monsters and Undead

A through essay: "Essence of Tainted beings" by Fenris Metsamees, a deeper research and inside look on the nature of those creatures.