I see there are four factions. So for those who've already played it, which group do you prefer to play, and why--- better units, special bonuses, etc?

No other reason other than I just prefer The Legions of the Damned. Though generally I just like all the factions. I probably like the Mountains Clans the least, though only really because I'm not too fond of their unit selection.
I prefer choosing the mage lord as I really like the two spells a day(Turn) and having access to the highest level spells.
And for those with no idea of what I'm talking about:
There are three lord types to choose from, warrior, mage and guildmaster(I think it was anyway).
Warrior gives your stacks 20% regeneration I think it was.
Mage gives you two spells a day and access to the highest level spells(If I recall correctly).
Guildmaster gives your thief leaders some extra options.

I don't know why, but I always stick with the Undead Hordes (I probably like vampires). I like their werewolf unit that is immune to non-elemental attacks,
I always try to develop this kind of squad (from left up corner to the right down one - sorry, I forgot most names from the game >_<):
1. paralyzer unit
2. a mage-like unit (attacks all enemies at the same time)
3. another paralyzer/mage
4. Death Knight (a hero)
5. Werewolf
6. Undead fighter (not the ones guarded from elemental attacks).
Hordes have many spell for changing enemy status (for example, decreasing their accuracy) and doing damage, but I don't remember their having spells to power up your units (so their spells aren't useful if you are attacking a city or capital).

I usually go with the Empire. Nothing extremely powerful, but a strong heal-all unit can greatly contribute to your units' life expectancy. That, coupled with a sniper, a mage and front line meatshields usually proves a fairly versatile party.

Empire -
Easiest to begin with. Esp if you want to start off with being a Mage Lord or Guildmaster.
Strong Fighter + Healer combo.
Alternate Fighter (Witch-Hunter) line is weak ('Mind attack Immunity' is really a non-issue.)
In missions where you are not allowed to upgrade beyond lvl 2 healers, choose 'Monk' instead of 'Cleric'. With entire tree available (upto lvl 3) choose Cleric --> Matriach.
Similarly lvl 2 Archer (Marksman) > lvl 2 Mage.
Good combination of Offensive (Summon Armor / Stone Golem) AND Defensive spells (buffing up parties for assaulting cities).
Strategy for 'Very Hard'-
Difference between 'Hard' and 'Very Hard' is that the enemy units keep gaining experience and upgrading much faster and upgrading Even Without Fighting Any Battles!!
With Empire, you can counter this (Although this is a little bit Tedious / Boring for my taste.)
Here's how it works -
All battles in Disciples 1 run till 10 Turns.
At the end of 10 turns, if neither party is completely eliminated, then the 'Attacking' party Auto-Retreats and surviving units (both sides) gain a certain amount of XP.
So if you have a 'focused-healer unit' like the Monk/Priest, then you can keep the weakest enemy unit alive (that does Minimum damage) until the 9th/10th turn thereby 'extracting' the Max possible XP-pts from a battle. This way you can upgrade to lvl 2 units much faster! (This worked a LOT better in Disciples 2 ;-) with the 'Defend' option)
For instance, if you have to take on a Orc-Goblin combo, then kill the Orc FIRST.
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Undead - THE most powerful Fighter / Mage units by far.
Deep Fighter and Mage Lines (BOTH go till lvl 4!)
Also, back row filled with Vampires defending a lvl 5 city is a Total Nightmare for the Enemy!!
Like the Empires' healers, the Undeads' Paralyzing units (Ghost--> Spectre) can be used to 'Extend' a battle till turn 10.
Special-
The Special unit (Werewolf - Immune to Weapons) makes a Terrific
partner for the Rod-Planting Banshee who has only 'One' Leadership till lvl 3.
But don't get cocky while trying to capture resources near enemy towns.
He can easly pummel you with Spells and finish you off with any low lvl party having a mage / spell caster unit!
Plus, Werewolves are Very expensive (at 1000 Gold Each!) and it would be a terrible waste.
So, you're better off having them defend Isolated / Frontline cities.
Have mostly Very Offensive spells. So be very careful while scouting near Undead towns.
You're Seemingly Super-Powerful Party can be reduced to Near-Death weaklings in a matter of seconds!
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Clans - Best Fighter / Ranger Leaders.
High hit-pts and Damage. Formidable even a low lvls.
The Fighter Leaders 'King's Guards' become Incredibly Powerful at medium and later lvls and can Single-handedly turn the tide of battle!
You thought the Orcs were tough? Heh!
But trade-off is Low Move-pts. Esp in maps with large water areas.
Mage unit 'Forge Guardian' is Immune to Fire thereby completely negating the EntireLegions''Sorceror->Demonologist->Pandemoneous' line.
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Legions - ALL Leaders are capable of flight, thereby increasing mobility Dramatically (esp over water).
Heavily armored 'Marble Gargoyles' are THE BEST Single units in lvl 5 city defense.
How Armor Works in Disciples-
Armor is added in Percentages.
So, a unit with 20% armor absorbs only 80% of Damage inflicted, thereby increasing the effective hit-pts by 1.25 times (1 divided by 0.8).
Thus behaving as if it had Zero Armor but 25% More hit-pts.
For instance,
30% armor = 1.42 times original hit-pts
50% armor = 2 times more
Now,
Marble Gargoyle has 150 hit-pts and 50% Armor to begin with.
So while 'Defending' lvl 5 city, the 30% 'Armor Bonus' is ADDED to 50% thus making it 80%!
This makes a 150 HP unit with 80% Armor the Equivalent to having a 750 HP unit with 0% Armor!!
And now comes the REALLY SCARY Part -
What if the Gargoyle is in a Party whose Leader is equipped with a banner that has 10% (or more) Armor bonus?
Now with a MAX Possible Armor of 90%, the Marble Gargoyle becomes a unit with 1500 Hp!!!!
Caveat? Very Weak against 'Thief-Poisoning' and to Spells while outside cities.
Both are cases where Armor is Worthless. Remember that.
The first successful Poison attempt by Thief reduces the Total HP
by half! (reducing with each following successful attempt)
And poison goes straight through Armor!
So use this strategy while taking on the Marble Gargoyles and be wary of Thieves + Enemy party working close to each other when you are playing with the Legions.
Also keep in mind that the Undead have a lvl 1 spell 'Rust' which reduces Armor by 50%, so the gargoyle can be easily made into a weak 150 HP unit with NO Armor when its roaming outside a city without any protection from spells.
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Also on a Sidenote,
I've managed to beat the DEMO Version (which has Empire and Undead) by killing Myzrael and Ashgan respectively :D
Myzrael is easy - Need buffed up Banshee with party made up of 'Angel' and 'Skeleton Champion' (Two Skeleton Champions or two Angels wont do because of limited Armor enhancing spells/potions in the demo).
Ashgan is more tedious - Just keep sending 'Rangers' with 3 Skeleton Champions' (Yes, to do this you must be Utterly Dominating the enemy and Rolling in GOLD :P)
Try it!
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capt.sekaran (sharkyforums.com)

Can someone explain to me how best to use the Nosferat as the leader of your primary battle stack? I tried putting one in the front row to attract attacks from enemies which its life drain powers would recover, but his HP is so low that the enemies usually have him for breakfast before he can recover.

Mountain Clans - dwarves are my fav fantasy race, so I'm very glad that developers of Disciples value them.

I like both the Empire and the Horde of the Undead :]
My fav. unit is imperial assasin :D

You have to keep him in the back row (as with all ranged/mage heroes) until he reaches a level high enough to withstand some serious blows. Items can help as well, with extra defence and initiative.
I guess my favo race would be the Legions of the Damned, I just really liked having only 4 units (experience is split among all troops, so if you gain 600 exp, and have 4 units, each gains 150 exp; however when you have 6 units (typical Empire stack) each unit only gains 100 exp). Plus the Gargoyles are so powerful, assasins don't even come near.