So, after spending time on two major projects using pallet wood (the headboard, and an upcoming post), I think it's worth a mention to describe how I go about getting it ready for usage.
Finding the pallets is easy; check the free section of your local Craigslist, or drive around the back of buildings and places that get regular shipments. More often than not, somebody is trying to get rid of some extra wood.
Once you get the pallets home, you need to disassemble them. You can do this in one of two ways: either extract the nails using a claw hammer, or cut the nail (see below) and remove the head from the wood. The second option is much faster, but it does have the disadvantage of leaving the center columns full of nail (which pretty much means it's useless for any project requiring a saw, as an upcoming post will demonstrate).
Once you have the boards separated, remove the nail heads from the pieces you want.
Pallet wood, by definition, isn't exactly precise. More often than not, you have boards that aren't perfectly straight on any side. For some projects this is fine (it might even add to the rustic look you want). For other projects, you might want to take the time to make sure you get a nice clean joint with no gaps.
To deal with this problem, I built a straight-line rip jig using plans I found in an old edition of Woodsmith magazine (#149). The basic idea is pretty simple; start with a piece of plywood for a base (at least three inches wider than the piece you want to straighten) that still has one factory edge. I chose a 48" length, but you can make it any size.
That's basically it! To use the jig, clamp down the pallet board on top of the plywood piece with at least some of the pallet board hanging over the edge. Set the fence on your table saw to cut the exact width of your piece of plywood, and the pallet board will be given a completely straight edge on one side.
If you are using boards from multiple pallets (or sometimes even the same one!) you may also need to plane them down to the same width. I borrowed a portable planer to do the headboard, and loved it! These are simple to use as long as you keep your fingers well away from anything sharp or pinchy.
And there you have it! One simple jig and a table saw makes it possible for you to turn rough pallet boards into perfectly aligned and ready-to-go material. All you need to build it is some scrap lumber and a pair of toggle clamps.
It looks like someone posted the plans online for this jig (#6 in the file) - don't know if this is Woodsmith or not.