I've been toying with the idea of making some projects from wood shipping pallets. I waffle back and forth on whether or not to try it. On one hand, you have an abundance of free wood. On the other hand, there are safety concerns regarding chemicals used to treat the wood or accidentally spilled on the pallets.
I came across this article on Instructibles which lays out the laws in the US regarding pallet construction. Each pallet is marked so you can easily see if it has been treated with chemicals or heat. Naturally, you want to avoid the ones with chemicals. Be sure to read the article if you ever intend to use pallets for your project.
The next concern is what was actually transported on the pallets. Perhaps some nasty chemical from a drum leaked onto the pallet. You just don't know. I'd avoid any pallet that looks like it has been stained by a spill, smells strange, or looks off. Don't use the pallets for anything that touches food. This includes making raised vegetable beds as the chemicals will leech into the soil and eventually into the veggies. Don't make anything that a child would interact with; toys, furniture, playhouses, etc. Children are much more susceptible to toxic chemicals.
When working with unknown wood, be sure to use a dust mask. You don't know what you're breathing in.
I guess the moral of the story is; use at your own risk. I know I still haven't decided if I'll use wood pallets for projects. Right now, I'm leaning toward no. What do you think?