Between collecting and breaking down pallets, I spent a lot of time building the double window and the diamond-shaped porthole for the playhouse.
I have a garage, but it's not heated. Sometimes it got pretty cold!
A few words about tools:
At minimum, you'll need a circular saw, hammer, crowbar or catspaw, and heavy cutting pliers. A handsaw will come in handy, too. A sturdy ladder is a must.
By far the most useful tool I had was my tablesaw. It's not necessary for the house itself, but without it I wouldn't have been able to make the siding. It also helped a lot on the windows and as an all-around tool.
But....you could get away with the circular saw, miter box, and a handsaw. Or replace the methods I used with ideas of your own.
The first step for the windows (two for the "ice cream window" and one for the porthole) was the basic frame. My idea was to take some old storm windows I had from my house and frame them in 1x4 pallet wood. You could use plexiglass or old glass from sashes, or even simple screening material.
I started with a long rabbet on the side of a 1x4. It took two cuts on my table saw, one for the depth, the rest for horizontal area. If you have a dado or a router, you could dig the rabbet out with that.