In the spectral region where the refractive index of the negative index material is approximately zero, at oblique incidence, the linear transmission of a finite structure composed of alternating layers of negative and positive index materials manifests the formation of a new type of band gap with exceptionally narrow band-edge resonances. In particular, for TM-polarized (transverse magnetic) incident waves, field values that can be achieved at the band edge may be much higher compared to field values achievable in standard photonic band-gap structures. We exploit the unique properties of these band-edge resonances for applications to nonlinear frequency conversion, second-harmonic generation, in particular. The simultaneous availability of high field localization and phase matching conditions may be exploited to achieve second-harmonic conversion efficiencies far better than those achievable in conventional photonic band-gap structures. Moreover, we study the role played by absorption within the negative index material, and find that the process remains efficient even for relatively high values of the absorption coefficient.