I asked a question a while back and found several people had built them...
1) I found a big pile of redwood 2x4s from an old deck; not too many nail holes. It will be a lot of gluing and resawing, but a heck of a lot cheaper than buying new cedar. They are painted on one surface. That won't hurt anything if I rough them up, will it? And the nail holes shouldn't matter much, should they? (should I put some caulk in the holes, or just leave them?)
2) The instructions I have say to stain them dark to absorb sunlight. I don't have any dark outdoor stain, but plenty of minwax provincal. Will that do, or is there a difference between indoor and outdoor stain?