The appearance of the undead consisted of exposed body muscle and a big hole in the stomach where the intestines should be. Proof of their existence can be found in four BRF files called 'undeadbody' found in the Mount&Blade CommonRes, bodymeshes.brf, and an undead head.
The undead are hostile storyline characters featured in version 0.202 of Mount&Blade, then called Warrider. Undead are a faction and finished graphics that were not included in the final game, similar in the scripts/code to the Ghouls (also removed).