The Hom-Dai curse was an ancient malediction created by the ancient high priests of Egypt as a punishment reserved for blasphemers.
The Hom-Dai was used by the ancient Egyptians only to punish the worst blasphemers that committed sexual crimes with the pharaoh's daughters and/or sons, and so was used very rarely, if at all. Although the curse was mentioned in text, there was no written case of it ever actually having been acted out, because the Egyptians feared it so, and the sole known case of the Hom-Dai ever being carried out was on that of the High Priest Imhotep, who committed the crime of using the black Book of the Dead to bring back his love, the Pharaoh Seti I's mistress, Anck-Su-Namun, from the dead. The Hom-Dai was meant so potent a curse that should any of its victims ever arise, with would come forth all the Ten Plagues of Egypt, as God himself had set unto Egypt in biblical times. The victim would also be condemned to a cursed life that would not end, even in death. And although a person cursed with the Hom-Dai might be physically dead, they were still capable of being brought back to life through an incantation from the Book of the Dead.
Bound to the victim's existence was a chest that, should it ever be opened, would leave those that opened it bound the curse of the Hom-Dai, as the original victim would seek out whomever was present when the chest was opened, so as to kill them and assimilate their organs and fluids. By doing this, the original Hom-Dai's victim would regenerate themselves to their original state of being, and no longer be undead, but a being with unspeakable powers and immortality. Until the victim is fully regenerated, they will fear the presence of cats, who are the guardians of the underworld in Egyptian mythology. The Hom-Dai was prepared by first cutting the person's tongue out.
The person was then mummified alive with scarabs, which would eat him very slowly and painfully. Reading from the Book of the Dead the cursed individual, giving them the power of invincibility, but condemning them to be a spreader of pestilence. A reading from the Book of Amun-Ra the immortality from the cursed individual, leaving them vulnerable and subject to being killed.
"The cursed victim, if brought back, would return a walking disease, a plague upon mankind, an unholy flesh eater, with the strength of ages, power over the sands, and the glory of invincibility. "
Based on several scenes in the first film, a victim of the curse could affect the mortal realm of Egypt in subtle ways, such as manipulating the sands and creating ominous noises to frighten away people and animals.