Vargul are former vrykul who have been brought to undeath because they were not found worthy by the Lich King. They are the losers of the challenge to "ascend" at Jotunheim. The winners are named ymirjar. Unlike other undead, they appear to retain some level of intelligence, and consequently many resent their fate.
Some individuals that use the vargul model seem to have ranking positions in the Scourge. It is unknown what this means for what a vargul is. Some undead vrykul may just be rotting.