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In rome total war there were some traits and retinue members that increased the chance that dead soldiers would be healed and ready for battle and some the casualties are still healed in Medieval 2 so you could mod those into the game so that almost all of the killed soldiers come back to emulate nocromancy.
Slanted that's the best suggestion ive seen on this page, but then again it's also the only one so i guess it's also, the worst suggestion i've seen on this page, and the shortest and the longest and blah blah blah blah blah.
I've just found this mod page and has been reading through this thread. What i was thinking about is how you are going to set the upkeep for the "Mercenary" Zombies and skeletons aswell as the retraining. In my opinion the upkeep should be considered to be 0 or very low. And then balancing that out by setting a very high upkeep on the Elite units as some people mentioned before.
In M2TW you can't retrain merc units so that would need to be solved or just let the player recruit new ones instead as zombies can't get experience in the same way as units that aren't controlled by someone elses mind. But it would be a bit wierd if you couldn't replenish the units numbers as they are just cannon fodder and low upkeep, as a commander i would always want them at full numbers.
I was also thinking about the routing a bit. I think it would be pretty cool if the zombie/skeletons(Mindless units) weren't able to flee as long as the commander is alive. Concernings the other units in the faction they shouldn't be able to rout either as undead and vampires can't actually feel fear.
I dont really know what's possible to do with the game engine.
putting my two cents in here....
having played many a battle against the undead it goes without saying that the general being alive bonus to the troops should be enormous, i.e. they wont flee but will fight to the death. therefore any body controlling the undead has to be careful as to whether they ever commit their general (who should be incredibly powerful), i think this method could incorporate the fear factor as the other side gets gradually worn down by always having to kill the opposition because they wont flee.
also, i have only flicked through this thread, but i dont think anybody mentioned black coachs which are the undeads mighty (pain in the arse) chariots.