Double post time, bringing some new info.
Dying is not a good thing... It does give you a lot of undead units, but it also cuts any access to human/orc/elf/dwarf recruiting and quest completion, as well as any items and spells that may spawn there. So for example, if Eviln is supposed to spawn in one of the orc buildings, and nowhere else, you may find yourself with absolutely no option to resurrect your beloved black knights/bone dragons and do a no-loss or minimum loss victory.
Once again, the Troll is an awesome unit. They can spawn pretty much everywhere - dwarven lands are a good spot for them. If you manage to lay your hands of some, a lot of victories are in the bag (spider, frog at night, several bounties).
Also, be aware that allying with the humans alienates the demons. You can still fix it though - by paying 50k gold. It sounds a lot, but it isn't, if you spend it carefully. Get everything you need from the humans/orcs/dwarves/elves before going for the undead army and you'll be just fine. The undead army also has a chance to spawn a number of Black Dragons as well, which will win a few bounties without a loss and with complete ease.
In general, trolls/black dragons is the key to victory on many occasions - if you lay your hands on some, you need no other armies. If you get some +% resistance items, they are wonderful to have as well.
And here's a nice little troll after the spider battle on hard
