K.N.
I think you need to decide whether the pallet in your room is staying or going. If he is to sleep in his bed, then get rid of the alternative.
You do realize that, as he gets older (and bigger/physically stronger), it will just get harder to break this habit...? 18-24 months from now, he could be a 4/5 yo and still doing this. I would also be concerned about the spinal and skeletal support he is getting for the majority of the night; small children grow so quickly and I seem to recall hearing that their mattress should have a certain firmness (not too firm, not too soft).
Of course, having a small child in your bedroom every night takes a hit on your couple time and intimacy with your husband.
And, being that we're in TX also... All the spiders try to get in the house during the hot summer months. Not sure how close he is to the floor and bedroom windows, but i'd want any blankets and whatnot off the floor.