First! Wish = Evil! My table top GM was related to me by blood and a complete sadist.. we just put white out over the spell and ignored it's existence.. less painful >.>
There's something that no one has mentioned yet that has had me curious since the class was released. Notice that when you go to customize your character you have a few options that really make them look dead, then a bunch that make them
not dead looking? I think that should have something to do with the nature of the creature you're creating. If you look dead, you are fully undead, if you don't look dead then you have a shot at being just in stasis which means you were alive when the ritual was performed and the necrotic energies changed you into a creature that the Lich King could utilize. Lich King can't control living people with souls, but can control crazy people who don't have souls or hover around the brink of death (like the plague victims that were suffering and dying but hadn't yet completely died that were marching with the rest of those who got up from their death bed)
***Unimportant background info, if impatient skip this section and go to the end***
If you look over all of fantasy RPGness created in the past 30 years you see a trend between them when it comes to things that are dead but not.
You have the dead dead (Rest in Peace in your grave like a good dead person)
You have the undead dead (Festering corpses that shamble around)
You have the living undead (Vampires and other classical smexy dead people)
You have the contracted undead (Diseased ninja-zombies that could be cured/decursed whatever)
Everyone loves sexy immortal people. Death Knights might be sexy but I don't think their biologicals are properly functioning in the sense that they would require sustenance (food, blood, wine, etc.) nor would they truly require breathing aside from the air necessary for speech.
It's going to be my opinion that DKs of the third generation will always be in a form of stasis, they aren't regenerating undead like the festering corpses that many Forsaken are unless they were Forsaken to begin with in which case I'd think they didn't rot anymore as their former selves may have.
If you change a living being, based on what we've seen in WoW Lore since the beginning, it tends to be harder to accomplish yet stronger in the end product then changing something that is already dead for the necromancers in the Scourge. Four horsemen and Arthas can attribute to that slight difference. What made the first generation so awesome wasn't that they were alive when raised, it was that they started out as very powerful warlocks then gained all the perks of being in a body that would continue long past normal endurances.
*** Important Part ***
So here we are back to square one. Alive at the time or dead at the time, in my honest opinion I don't think it would matter to the biological state you are in now which is the thresh hold between life and death meaning Undead. You don't have to eat, don't have to breath, don't have the biological imperatives that contribute to the ERP aspect that was danced around. This doesn't necessarily mean you can't enjoy these activities, it simply means you don't have to engage them and to me would also mean you can't enjoy them the way the living does. (Thus the complaining about being undead and how it ticks people off)
What matters to me about the living or dead at the time of change is how it influences the character's RP side, not their biology. If you were a living fanatic devoted to the Lich King before you were changed, chances are your true loyalties are still going to be to the Lich King and you would be something of a covert agent hiding amidst the others. If you were dead and remember your former life then you have a small chance at continuing it, atoning for it or trying to get revenge for the loss of it.