I've stayed at The Palms quite a few times in the last couple of months. I always try to get there in time for Ditch Friday. The pool party is complimentary to hotel guests - and it never fails to deliver a good time.
The pool area is large, and comfortably spread out. There's plenty of room for all, at least until about 4PM, when it starts getting packed.
There are some downsides. Alcohol prices could be better. Better as in: paying $70 for 5 beer buckets is just a bit much. I recommend getting to know one of the bartenders, or getting sauced in your room before hitting the party.
Aside from Ditch Fridays, this pool is lovely on other days - not to mention much quieter and more relaxing.
Another thing to be aware of - this pool closes fairly early. It is usually shut down by about 7 or 8PM (not sure which), in order to give the cleaning crews time to prep it for the following day.