[Faceman]

You don't have to be in melee range but pretty close about the range of a throwing weapon (dart, axe, hammer NOT ranged weapon like Sling, Bow,...)
Good Clerics will turn undead (i.e. make them run away) or destroy them (if they have high enough level)
Bad Clerics will turn them or make them fight for your party (green circles).
Success depends on the level of your cleric and the level of the undead (Skeleton=easy, Lich=nearly impossible)
Also you have to leave the turn undead option on until you have turned (unlike IWD2 where you use it like a spell). So be sure to turn off party AI because that way your clerics will turn off TU and engage in combat (smae for Bards playing songs)