Like all +1 weapons, the DM will add +1 to the AC hit when using this weapon but the damage bonus has already been factored into the damage wheel.
When fighting Incorporeal undead, the 50% chance to miss is negated. (E.g., when fighting a ghost, even if you slide a hit, there is still a 50/50 chance your weapon will harmlessly pass through it.) This does not mean you are guaranteed to hit an undead target when attacking with this weapon.