Curse of the Undead can only be used on pets in your graveyard (and possibly only on adult pets? I'm not entirely sure, but I've heard that and I've only tried using it on adult pets).

So to use it on a pet you either have to wait for them to starve, or you can use a Potion of Death to kill them instantly, and then you resurrect them with the Curse of the Undead INSTEAD of a Resurrection Potion.

Make sense?