Doug Calderone of Pootatuck Pallet Projects chronicles the structures and furniture he makes from discarded pallets for the Tiny House Blog, with which Curbed Philly has a minor obsession. (For some reason, tiny houses seem more acceptable than tiny apartments.) The gallery shows some of Doug's projects.
In Philly, pallets were used to build housing structures during Occupy Philly's stay at Dilworth Plaza:
But if you want to do something less controversial—more akin to Doug's Adirondack chairs—craigslist is a great source of free pallets: