Demons and undead were't separated until DomII, and they share many traits. However, there are some differences.
Undead are usually cheap and from weak to mediocre with few exceptionally good ones (wraiths, banes, their commanders). Undead are easy to mass, except those few really good ones. All undead have encumberance of 0, so they do not get fatique. Many undead, but not all of them, are mindless.
Most demons are elite types but have next to no equipment. They have very high abilities (att/def/magic res. of 18 plus very high hp...
). Demon knights come with good equipment, but there are no national mages capable of summoning them. Other demons might have a weapon but have no armor. They have good natura protection, and although it helps it does not protect them if they get hit. Unique demon commanders are very tough mages that often have special abilities and/or come with magical equipment build-in. I think demons have low encumberance but no 0, so they will fatique out if the battle takes long enough.
There are spells and items that are deadly against undead, demons or both undead and demons. For spells, nature Maggots kills undead, blood Banish Demon demons, Wither Bones, Dust to Dust etc. death spells devastate undead. Priests have Banish versus undead and Smite Demon vesrus demons. Both are negated by magic res. and better undead and all demons have so high magic res. that priest spells only rarely work versus them.