Pay half your life, rounded up: Lurking Evil becomes a 4/4 Horror creature with flying.
10/4/2004 If you have zero or negative life, half your life is zero, so it costs nothing to use the ability.
10/4/2004 When it turns into a creature, it is no longer an enchantment.
8/1/2008 A noncreature permanent that turns into a creature can attack, and its abilities can be activated, only if its controller has continuously controlled that permanent since the beginning of their most recent turn. It doesn’t matter how long the permanent has been a creature.