Making a couch with pallets is actually a really easy project to pull off. Basically, once you get your hands on two pallets and a twin mattress (or similarly long pad), you can take this in any direction you want. It would, however, be a good idea to start by either staining or painting the pallets.
If you really want to go all out, you can reinforce the pallets with blocks of wood, cut to fit. You can join the two pallets together with wooden blocks as well — and even mount furniture wheels to your new creation to make it mobile. A cheap, used, twin-sized mattress makes for the perfect seat cushion, and you get to be as creative as you want in covering it. Pick any assortment of throw pillows or blanket-rolls to complete the whole thing and you're finished.
You can make the couch higher or lower just by adding layers of pallets, plus, if you've got an extra pallet lying around afterwards, you can always turn it into a vertical garden.