This might depend on how your DM rules WoC to work. While it technically doesn't say the user gains no benefit if it can't take the nonlethal damage, one of the themes in the BoED is making sacrifices to gain beneficial power, thus a DM might say that because you are circumventing the nonlethal damage you can't gain the benefits of the feat. There's also the issue about being undead and using it, depending on how the character came to be undead perhaps.
As for healing up the damage, effects that heal hitpoint damage also heal an equal amount of nonlethal damage. I'm not quite sure what would work as a free or swift action except for maybe the Vigor line healing every round. Or contingent cure spells. Or perhaps inflict spells since you're undead?
If it wasn't for a warforged's charisma penalty I might have suggested that race and the Improved Resiliency feat to prevent nonlethal.