Hey I've been playing this mod and I believe it has great potential. I understand that it is a work in progress, and therefore I am going to make some suggestions:
Post-apocalyptic beginning
The beginning of the game doesn't have the feeling of being "post-apocalyptic". I think that the zombies are based on the idea that a disease has been spread world-wide, isn't it?. So if it was a virus that was spread all around the globe, then there should be abandoned cities, farms, mines and cottages everywhere. There should be the feeling that one month before the world was full of humans. Also, there should be some signs of the virus: maybe some plots are "infected" (-1

to cities with infected plots on their city radius, that spreads like hell in Fall from Heaven 2).
Undead spawning
The first 5-10 turns should be a bit relaxed somehow (you think you are the "only" survivors of the plague). Then the first undead is seen (maybe some pop-up messange "oh god, the deads are walking again"), and since that moment undeads start to spawn out of control. The vainilla BtS rate of barbarians is not enough, maybe Fall from Heaven levels should be reached or even more. The world should be really hostile. Right now it doesn't feel so hostile.
Abandoned cities
Abandoned cities could be there just for flavour but could introduce an interesting mechanism. If a settler creates a city in a plot which has some ruins or abandoned city, then several (2-3) random tier 1 buildings could be automatically built in the new city (meaning that they were already there, but abandoned). Also, zombies should spawn more frequently in abandoned cities than in empty plots, so colonizing an abandoned city is not an easy task.
Infection
I like very much the idea of an infection mechanism. My personal view of it is that any unit that gets a single hit from an undead, gets the "infected" promotion (something like -20% healing per turn, -20% strength). Also, any unit which dies having the "infected" promotion generates an undead barbarian unit. This way, any unit without the help of a medic or an infirmary in a city (that give positive healing per turn) will die in 5 turns and become a zombie. I preffer this feeling of being totally doomed than "random chances" of becoming a zombie. Of course this should be balanced somehow.
Combat against undead
If the infection mechanism gives a great advantage on the undead, then I believe that they should be somehow weaker in combat. As tier 1 units have fire weapons, I would give them 1-2 first strikes. I believe that most tier 1 units have 2 strength and so do have tier 1 zombies. This means that a tier 1 unit in a good defensive position (city with stockade, hill, forest...) will have the option of greatly weakening the zombies with the first strikes and manage to avoid being hit afterwards.
Undead healing rate
I think all the undead should have +50% healing rate (meaning that they have strong regeneration powers). Any damaged zombie that has survived should be perfectly active in two turns. Of course this should be balanced somehow, maybe weaker undead shouldn't regenerate so fast.
These are my personal ideas, I hope they help
