I HATE this stupid ice-palace battle game!
After taking on 150+ monsters (100 still to follow) I get rewarded with the famous Club of Disruption +3 (read a spoiler about it somewhere). The thing is I have not killed a single undead with it yet.
I have so far battled the following creatures with it
Shadow - no effect whatsoever (however I can turn undead on this one and I know he was "undead" in SoA)
Drowned Dead - no effect (sounded undead to me)
etc.

By the way what does the "outsiders" in the item description mean. Is there a list anywhere as to what creatures are actually to be slain with the CoD+3?

Outsiders are things that are native to other planes, or depends on energies from other planes to survive. Daemons, aasimon, elementals, high level monks, things like that.

I dont know why Shadows are not vulnerable to that club, I would have thought they would be. Drowned Dead are bugged, they are also invulnerable to turn undead (unlike in IWD1). Probably missing the undead flag, this is the sort of thing Kevin Dorner gets in Baldurdash, cept there isnt one for IWD. The other undead should be vulnerable, including things like Vampires and Liches.

You'll change your tune about that club when you start facing elementals and demons and a SINGLE hit kills them. That club is the most useful weapon in the game at that point.

tested it a little bit more and I am still disappointed.
It may slay Demons and Elementals but they get a chance to save at no penalty
Thus they make their saves at a roll of
Elder Earth Elemental: 2
Fire Elemental: 2
Gelugon: 2
Glabrezu: 2
Apocalyptic Boneguard: 2
Cornugon: 4

This leaves me with a small 5% chance of instant kill (15% for the Cornugon).
Now don't get me wrong, I think the Club is a very balanced weapon (reminds me of the Slayer in Ultima 8), I wouldn't want a "instant kill-no save" weapon but I don't think it's worth the worry or the praise it is given.

By the way. What do the saves (roll+bonus) have to match in order to be successful? At first I figured it should match my level but then I slayed a Cornugon with a total of 12 although I'm only lvl11. I know my way rather well around in the D&D 2nd Ed. but the 3rd still won't get into my head.

Is the spell "Greater Malison" present in IWD2? I seem to recall seeing it. Anyway, if its anything like its BG2 incarnation it would make the club a lot more powerful. And it bypasses MR as well IIRC.

Yes, Malison is in IWD2.