I have converted a chest freezer into a kegerator by building a wooden collar around the top and re-mounting the freezer lid on that. I installed four faucets in the front and have a hole in the back for the temperature probe. Everything works great, except I get a lot of condensation on the walls and pools of water on the floor of the kegerator. What is the best thing I could do to minimize or prevent all of this condensation?
If condensation occurs and you don't open the door very often, then you have a problem with the seal or insulation. Make sure that the door seals properly and the hole that your lines run though is not so large that lots of air can pass through. Also, if you have a draft tower connected directly to the kegerator... insulate it. Air leakage is more than likely the issue here; I would not simply purchase a moisture absorber, as this is a band-aid and does not fix the problem. As stated in the post above mine, sealing the kegerator properly will prevent condensation and lower the energy consumption of the unit... not to mention increase the longevity of your kegerator.
The best thing to use is a product called Damprid. I think it's a silica based product that absorbs moisture in the air. You can usually find it a places like home depot or lowes. It comes in a tub like container and you just take the lid off and leave it in the freezer. You can reuse the product by drying it out in the oven.
Damprid no-doubt is an effective solution to the excess moisture condensing in the fridge HOWEVER this is simply a band-aid solution to temporarily correct the symptoms of the problem and not a cure.
If you have an excess of humidity in your climate, AND frequently open the door, it's possible the moisture is naturally collecting in your kegerator however this is unlikely.
The more likely cause is an incomplete seal around your door allowing outside (humid) air to enter the kegerator freely and continuously deposit the moisture on the cold surfaces inside. This is evident by the massive amounts of water condensing inside the fridge (enough to form pools).
The solution and cure to the root cause of the problem is to ensure a proper seal around all sides of the door (and insulate/seal any holes such as those drilled for the tap lines).
Make sure to check all sides of the seal, most likely there is a gap somewhere along the vinyl/magnetic strip. Often 2 or 3 of the 4 sides seal correctly but there will be a gap on the fourth side (usually the one hardest to inspect). Good luck!
Condensation is probably due to humidity in the air whenever you open up the kegerator. I'd recommend Damp-rid (or similar products as NBChris has already said).
If moisture is also getting in because the holes in the wood collar are too big for the hoses/cables, you may want to get some sort of gasket or sealing foam to keep outside air out (and inside air in). That should cut down on both the condensation, and maybe even how much energy it consumes (since it's no longer leaking cooled air outside of the freezer).