Going green and creating your own compost bin isn't as hard as you might think. All those grass clippings, plant prunings, and other yard stuff is easily recycled into compost. The project is simple.
You need pallets, wire (to bind them together), some simple tools, and any extra hardware you would like to add for ease of use.

Step 1: Getting It Together...The Lay Out.

Your going to need 4 pallets minimum. If you decide on a slanted base (floor), you'll need another pallet. Some people may choose a slanted base design to catch the "tea" that your composter produces when watering your compost. The "tea" can be diluted and sprayed on your plants.
We don't have a slanted base in this design. Simple is easier. We're going with 3 sides and a door.

Choose your lay out. I don't need a huge bin, so I opted to stand the sides up to narrow the bins depth. Plus, it gives me a 2x4 side to attach my hinges to.

Step 2: Piecing It Together.

I've purchased 14 gauge wire, hinges, and a latch for my bin. If you want to pass on these items, you can still get by with just the wire to bind the pallets together. A make-shift hinge can be made from the wire.

Start with cutting the wire to a workable length, roughly 18", and strap the side and back pallets together by twisting the wire tight. Be careful not to over do it. Too much tension and the wire will break. Two lengths twisted on each corner should be plenty.

Step 3: Adding Some Stability....

I've opted to add a landscape pole to the hinge-side of the bin. These pallets are not light and I wanted the hinges to support some of the weight of the door pallet. I had originally thought I was going to put pole in both side pallets, but figured I only need the hinge-side to be supported. I hammer into the ground about 12".

Step 4: Adding the Hardware

Once you've finished tying the pallets together. It's time to add hinges. My hinges were about $6.50 from the Depot. A little better than constucting wire hinges.

Now, we're ready for the door.

Step 5: The Door.

Before adding the door to the bin, I added a spacer to the bottom by using the left over scrap from the landscaping pole and attaching it with screws. This will provide some ventilation for the compost since all other sides sit on the ground.

Next, attach the door.

Step 6: Optional, More Hardware.

In most cases, you would be done. I, however, need more bling for my bin. I've added a latch to keep my 2yr old out the bin.

AND YOU'RE DONE....Or are you.

Step 7: More Stuff.

If you live in a climate that has good to mild humidity, you would be done at this point. However, I live in hell, Phoenix, AZ. Mesa to be precise.
We don't have much humidity and moisture is what helps to break down the organics in your composter. To effectively do this, we need to add some heavy duty plastic to the bin to help keep some of the moisture in the bin. Moisture and heat are a compost bin's best friend.

Step 8: Start Your Compost.

I've left the plastic off the door. I will have to experiment to see if it works with or without it.

My wife has already been starting a compost bin with a large storage bin from Walmart. Its done a great job. Just not big enough for our needs.

Good luck. I hope this helps you in your green endeavors.