Perhaps as an admission of its incompatibility with the canon of the world, Undead Nightmare is a standalone experience that takes place between the end of Marston's quest to find his family, and the game's final battle. Nothing is carried over from the main game, with the exception of any new weapons unlocked by the game's other DLC. The goal of this quest is to rid the country of a zombie infestation, a journey that will take a player anywhere from 5-12 hours, depending on their skill and propensity to complete side quests. Rockstar wouldn't reveal exactly how much of the map would be infected, but they did tease that a new area would be added to the world via this expansion.
The cure to the undead plague appears to be rather simple. At cemeteries, there will be a collection of coffins you'll have to burn. Of course, this is easier said than done. [Update: Rockstar offered clarification, adding that "clearing the graveyard is just a small piece of the narrative and it is one of the many theories people in RDR have as to the cause of the plague. But it's definitely not the entire plot of the game."] Burning one coffin will trigger a massive influx of enemies, as they rise from the ground. As you burn the coffins and fight the swarm, you'll eventually encounter a boss zombie. Take him down, and you'll rid the area of the zombie menace, clearing the skies in the immediate vicinity whilst lowering the frequency of random "ambient" zombie attacks. Zombies will take a considerable amount of damage, but a clean shot to the head will take them down. Precise targeting is definitely a must for this mode, and frequent use of the Dead Eye is necessary to survive the horde. Because the undead don't (usually) carry around guns, ammo becomes a greater concern in the DLC, as you'll find yourself switching between weapons, desperately trying to find a weapon that can fight the zombies off.
For some, the experience will be thrilling. It's not often Marston has to take on so many enemies at once; however, others will find the (understandably) stupid AI of the zombies to make for less-than-inspired fights. There are a variety of zombies -- some will charge at you quickly, while others will shoot projectile vomit -- but for the most part, circle strafing and running away seem to be effective strategies. These battles go on for quite a long time, and the lack of checkpoints mid-battle can make the experience repetitive and tiring.
But in typical Rockstar fashion, these enemy encounters are but a small part of a much greater experience. While fighting undead humans can get tiring, when was the last time you got to fight a zombie bear? Have you ever ridden a zombie horse? In Undead Nightmare, you can, and the brain-eating variety controls a bit differently than the hay-eating kind. Finally, there will be some kind of multiplayer component to the DLC, although Rockstar was quiet on what that would entail.
Even after playing Undead Nightmare, the entire concept comes off as a big gimmick. But, at least it's shaping up to be a gimmick packed with a lot of value. Red Dead Redemption fans can look forward to it "very soon."