Can wood pallets be used for wood flooring?

I'm wondering if I could use wood pallets for flooring, (taking them apart of course :)
and then paint them white and distress them with a light sanding, and then coat with an acrylic urethane.
Has anyone had any experience with using wood pallets for flooring or with a white painted floor?
Any other ideas for a cheap floor? It will be going in a 900 sq ft upstairs with 2 kids bedrooms, a guest bedroom, a bathroom and a small living room/play area.
I really don't want to spend a lot of money on flooring as these rooms are rather small and by the time I get furniture in there you won't be able to see a lot of floor anyway. I'd rather spend my money downstairs.
I seen the threads on brown bagging, but I don't think my husband would go for that. Might do it anyway! cheap flooring anyone?