Well, thanks to decreasing the resolution (doh) I can know play My Pet Dungeon Keeper II without interruption.

When I convert creatures they cause my evil creatures to be unhappy. I wonder if there are any viable strategies to deal with that (or avoid it?)

Futhermore, I have waaaay to many dark elves. Thats because I like to place a lot of guard posts, I presume. Do smaller guard rooms mean less elves or do only the numbers count?

Also, when I throw dark elves into portals, they eventually come back.

Converted heroes and evil minions don't mix well together. If you want to avoid putting them both in a bad mood, you have to create separate rooms for them so that they each have their own little areas of your dungeon.

Regarding dark elves : I usually just sacrifice them in the temple, but I rarely build guard rooms anyway. I don't see the point.