When we bought our house there was a built in desk/open cabinet in a space about the size of a fridge. We decided to replace the desk (shown with a small dog) with a bar, because drinking is the only business we do in the kitchen.
We had some old pallets in the woods behind our place, and always have access to new pallets in the industrial park we work in. (Most places just stack them in the parking lot, also check craigslist)

Step 1: Prep

Measure the area you want to put your bar in. For me that meant demo-ing the desk, and eventually the open cabinet too.

I used a chop saw to cut a bunch of the pallet boards into random lengths. I put different finishes on them, either by staining or burning them with a propane torch. I also hit some with nuts and bolts and generally beat them up. From there I sanded with 100 grit, re-stained/burned, 250 grit.. repeat going up in grit until 600 grit sandpaper and I was happy with the finishes.

I then set them on a sheet of plywood with my measurements duct taped off, so I could block out the basic size.

Step 2: Frame

Next I took some 2x3 lumber and built a frame to fit the space, making sure the pallet boards had overhang on all sides.

Once I knew the sizing was right, I added a plywood deck, and did a test fitting.

The test fitting took a lot more work than I expected, as it wasn't perfectly flat after taking out the old desk. It had some lumps and bumps from the skim coat. I used a belt sander with 40 grit paper to take the frame of the bar down to the perfect size.

Step 3: GLUE!!

Next I used Liquid Nails, but I'm sure you can use any really strong construction adhesive, to lay the pallet boards on the frame. Make sure you press down good and hard!

I had sanded some of the boards down, on the underside, to make them sit level, but I left others a little wonky to give the finished bar a more rugged feel.

I did another round of 40 grit belt sanding once the glue was set, to match the pallet boards to the frame. Next was another test fit, using myself as a stand.

Step 4: Shellac

Because a bar will see a good deal of spills, I ended up using quite a few coats of shellac. This involved applying the shellac with a clean rag, letting it dry for at least an hour and then sanding with 400 grit sandpaper. I did this 6 times.