Reposted and expanded-on yammery comment i left on dear_gnome.
So we know DKs can bleed internally because Koltira snarks about that. We know they can sleep, and since their brains function then they can doubtless dream. The wraithy things that pick on Koltira may well do the bulk of their trollan in dreams as well as lurking in his peripheral vision, since slipping into the astral unknowingly whilst dreaming, and running into things with big sharp teeth, is a common fantasy thing.
They are not alive. They are mos def' undead.
But saying that undeath ought to preclude one from sex is disregarding a metric buttload of mythos and folklore that long predates WoW. Take for example the concept of the dhampir. Kikuchi did NOT make that up; dhampir are Balkan folkloric in origin. Depending on what canon you're going by, Dracula's been (un)dead for anywhere from 600 to 1000 (DAMN IT IGA ahem) to something like 45 000 (DAMN IT KIKUCHI i'm done now really) years. And yet--he still has children. One, if you're going by Castlevania. MANY in the Vampire Hunter D novels, of which D is perhaps the only survivor.
Mind, I don't think DKs can have kids. Dracula is kind of special/weird, so he gets an exception. XD This is not to say that I forbid people from writing such a thing, just that I don't figure it'd work thus. YMMV!
Anyway. If DKs can bleed, then...why could they not get aroused? I know there's plenty of crappy RP out there that wants to have it both ways--the phenomenal cosmic powers without the ittybitty living space as it were--but not everyone who writes DKs as capable of gettin' it up and gettin' it on is a twinkmachine. XD It may be more COMMON among twinkmachines, but there's just as many twinkmachines having their DK wangst about no sex drive. It's a case of daft writing rather than daft concept.
For me? When it comes to well preserved looking undead like the second-gen Death Knights (the Forsaken are an exception to this but I have no doubt they find one another hawt and are, considering everything, well-preserved by comparison) I tend, because LOLTEENAGEBUFFYFANDAYS, to write 'em a bit like re-soul'd Whedonpires. So it's like: breathing is force of habit/getting the air to talk, you CAN eat but it just kinda...passes the time, you can shag sure but your partner is going to be in for a shock if they expect you to have a body temperature above 'rather chilly' (ESPECIALLY if you're Frost-specced lol), the Light without exception burns like a burning burning burn-thing...( THINGS! MORE THINGS! )
ETA: Just to clarify, in case i've come off like a jerk: I am totally not saying that My Way is the Highway here; I'm just casting a big side-eye at people who DO get up to that and actually encourage the hassling of those who dare transgress form their guidelines. If this type of person is gonna tout themselves as Smarter Than Thou then they'd best
check theyselves b-4 they wreck theyselves
do their homework before claiming things like 'undead characters never have sex ever in literature or folklore anywhere pre-Buffy'.
Carmilla von Karnstein would like a word. XD
tl;dr write what you like, explore what you like. Do it as best you can and don't Knaak out and we're all happy XD