Once a fair and stately palace —
Radiant palace — reared its head
In the monarch Thought's dominion —
It stood there!
Never seraph spread a pinion
Over fabric half so fair!
Banners yellow, glorious, golden
On its roof did float and flow
(This — all this — was in the olden
Time long ago,)
And every gentle air that dallied
In that sweet day
Along the ramparts plumed and pallid
A winged odor went away
Wanderers in that happy valley
Through two luminous windows, saw
First, pallid means deficient in color, or lacking sparkle or liveliness.  This line in the poem is stating that the palace is not very appealing to the eye in the way most palaces are.  The place is very original and not highly dramatic like most places.
The Haunted Palace