Collusion
Colluding is when two or more players play cooperatively on the same table in order to get more information about what cards are out there. MySpace "Poker Palace" is just for play money so it is unlikely you will get in any legal trouble for this. You may possibly get your membership suspended if caught, so proceed at your own risk. Get a buddy to play with you and chat via IM. Do not get into any battles with each other over pots. If you and your partner are the only ones in the hand, have the person with the larger chip-stack fold to the player with the shorter chip-stack.
Ghost Accounts
Make new MySpace accounts and install the "Poker Palace" app on your new profiles. Log into MySpace on the ghost account and join your real account at a table no one else is playing on. Purposely make the dummy account lose all its chips to your main account for a quick way to get more chips. There is a chip bonus for logging into "Poker Palace" every 24 hours so you can drain all of your dummy accounts once a day.
Table Domination
This is a combination of Collusion and Ghost accounts. You will need a friend and both of you will need 3 ghost accounts apiece. Join an empty 9-player maximum table in a high stakes game and make your main accounts and ghost accounts join the table. When a new player joins the table, you out-number him 8 to 1. He can still win pots occasionally but you have him beat in the long run. This takes a lot of chips to set up because of the stakes but it is a very effective cheat.
Scamming
This is the least attractive way to cheat on "Poker Palace" but it is still effective. Try making a MySpace account and setting an attractive woman's picture as your profile image. Pictures are displayed in "Poker Palace" and you have a great chance of getting men to give you free chips if you just ask. Not as profitable as the "Table Domination" method but it is still lucrative.