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I am, of course, a big fan of Death Knights, but there's nothing to replace them with, and making them level 8 is too much. I wouldn't even think of giving Gnomes 7 levels, let alone 8...
I would suggest making it so that for some factions, you can choose between certain levels. For example, you either build a structure for Undead or for Death Knights (although it would be better to make Death Knights level 7), and after building one structure, the other is blocked (like in Heroes 4). This would resolve this endless debate. You could also add Mummies at level 3 or 4.
Added after 4 minutes
I think that Ghosts should have their ability to replenish their numbers by draining the enemy's mana removed. They are already too strong; they should just destroy it.
Added after 20 minutes
Why is level 7 just a dragon? After all, Necromancers can do anything they want with bones. It wouldn't hurt to add large claws, bony spikes all over the body, huge fangs, and a couple more limbs. :eek:
I've been looking at them a lot and I can't understand why they are ghostly. They need to change their name; I also don't understand how a pile of bones can curse. They should remove the curse and add fear (like the Azure Dragons in Heroes 3) - my appearance is scary enough.