I get asked all the time how I tear down pallets.
When I started doing this, I used the only method I could think of by using a hammer and a crowbar. Not only was it painful, I lost a lot of nails. One of the best things about using pallet wood for making great stuff is the nail heads that are still in the wood.
With this method that I use, you are able to save many of the nail heads and also save a ton of time with every pallet you tear down. Enjoy!