I've been out of D&D for a long time, but getting involved in a new campaign, heavily weighted with undead. I'm playing a Paladin and the DM is allowing us choice of item. Not sure what to get considering the campaign type. He didn't indicate cost limits, and some person already received approval for Holy Composite Longbow+1 and Dwarven waraxe with bane (undead) and keen for examples. Thanks!
It depends whether you want to be a key damage dealer or not. (And how much $$ your DM is letting you have to equip.)
The Holy Avenger is a good choice that augments defense of the paladin and the entire party, so if you want to be a support/healer/defending type it's great.
If you want to deal damage, undead bane is great and cheap.
Holy actually isn't quite as good specifically against undead (and there are neutral undead, warning!) but if you're also going to be dealing with demons and devils and stuff has wider utility, and it bypasses "good" DR.
At mid to high levels most undead will be incorporeal and you will really, really need ghost touch. It's also nice and cheap. (You definitely want this on armor too)
Disruption is more useful at low levels. A DC 14 Will save is reasonably easy to make and it leaves you with zero damage enhancement. Better if you have lots of attacks (two weapon) or don't have good damage anyway and the chance of instakill is better (like a rogue with no damage bonus but high sneak attack).
So I'd tend to say "undead bane + ghost touch" for damage (+3 equiv), holy (+3 equiv) if your game isn't really going to be all about undead, and holy avenger if you can get away with it and want to be a support type.
If you're allowed the Magic Item Compendium and its glorious, glorious cheese, look at the Crystal of Screening (provides incorporeal touch protection), or Lifekeeping (protects against death effects).
In terms of weapons, there is a Divine Wrath weapon enchant that gives you +1d6 per point of CHA bonus at the cost of a turn undead attempt - your character style might dictate that fewer big punches are better than +2d6 on lots of punches. Ghost Strike probably isn't worth it. Sacred is a suboptimal mix of holy and undead bane, but you can put Sacred Burst atop it if it's your thing.
And truedeath crystals are a cheap way of getting an additional d6 of damage; their price doesn't up the "plusses cost" so if you're dealing with a high plus weapon, it's less expensive than adding more enchants and you can port it to later weapons you find that are "good but aren't ghost touch" for example.
If you're in the mood to be a traditionalist (and not at all cheesy), a (blunt weapon) of disruption is always fun.
If you want to be a paladin par-excellance, with a weapon that looks to be cheesy, a Holy Avenger is a good request.
On a more practical note, armor enchanted as per custom magic item rules with death ward is quite literally a life-saver at (Command word activated, unlimited uses per day, 4*7*1800=50400 gold, drop uses per day for a discount). As a paladin, you're at a severe disadvantage already, so a more powerful item is indicated. At the price point of Holy+1 (18000 gp), and browsing through Bunko's Bargain Basement we don't see a lot at that price point. Browsing through the forums, we find this ancient thread on the paladins. It suggests maybe a "Truedeath crystal" for your weapon and ghost ward armor.
Also take a look at the heroes of horror book and Libris Mortis for collections of interesting items. Complete Divine may have some relics of interest as well.
This answer can be more specific if you indicate what kind of build you're going for.
Here are a few useful items that a paladin could find helpful against undead
Shirt of Wraith Stalking (MiC 216, 6,000 gp) Hide from Undead at will with no save, even for intelligent undead.
Truedeath Crystal (lesser) (MiC 66, 5,000 gp) Gives the weapon the Ghost Touch ability for much less than it would cost to add the ability to a high-powered weapon.
If you can purchase items from the Magic Item Compendium, then Deathstrike Bracers would be a good option, particularly for a rogue or anyone with a keen weapon:
Activation: Swift (mental)
When activated, deathstrike bracers allow you to use melee weapons to deal extra damage from critical hits and sneak attacks to constructs, elementals, oozes, plants, and undead as if they were not immune to such extra damage.
See also the Undead Bane Weapon spell in the Spell Compendium (Cleric 4, Paladin 3). Duration is 1 hour/level and it can affect one weapon or 50 projectiles.
A scarab of protection.1 It's in the SRD.
While not offensive, few other items provide protection from negative energy and death effects. Add in protection from energy drain and you've got a nice item. SR20 isn't terrible. Even if it's only useful against twelve attacks, it's still pretty cool. Maybe you could even up the number of attacks it is useful against by upping the price. Even my epic level ninja/fighter/assassin picked up one of these, and she wasn't even terribly interested in undead.