Stewart Macdonald Guitar Shop Supply (www.stewmac.com) sells special fret
pulling pliers. If you check out the site, it's clear that you could
grind a pair out of nippers fairly easily. Stew Mac also has books
on fretting techniques, which may be helpful. Most of those will
deal with the task of installing, leveling, and dressing frets, but they
will also tell how to remove them without damaging anything. One
trick I've heard is to heat the fret with a soldering iron before you try
to pull it out.
On our lined fretless basses, we slot them as if they would be fretted, and then fill the slots with thin strips of binding material. You could use binding material, wood strips, or a shell material such as mother of pearl or abalone (difficult, but nice) to fill the slots. Filling the slots with epoxy or wood dust would work, but it tends to look sloppy, especially on a maple neck.
I filed the frets off of my second bass. It came out fine and is probably the easiest and safest way to make a fretless, but is doesn't seem that way while you're filing for hours on end. If you do it this way, stop filing as soon as the fret is gone and then use a fingerboard leveling tool to finish.
The fret tang has little teeth that grab the sides of the slot, so when you pull a fret out it may make the slot jagged. That's if you're careful. If not, you'll pull up splinters of wood from around the top of the slot. The key is to take your time and be gentle. If you do get splintering, use cyanoacrylate to put the pieces back where they belong.
At any rate, if you're going to use a strip of material to fill the slot, you may want to use a gauged-width saw to even out the edges of the slot and to make the bottom of the slot flat instead of curved. This will also give you a slot of a known width, so you can buy (or make) the appropriately sized filler strip. You don't want to have to force the filler strip into the slots. If you do, you may create a backbow in the neck. After a filler strip is in, water-thin cyanoacrylate (super-glue) will wick into the slot when it is applied.
After the filler material is installed and the excess is sanded off, you will want to level the fingerboard. To do this, first use the truss rod to dial a relief into the neck, and then use a long, flat sanding tool like those sold in Stew-Mac to sand the fingerboard level. A radius sanding tool will help to put a nice, even radius on the neck.
I know I'm starting to sound like an advertisement for Stewart Macdonald, but sometimes having the right tools makes all the difference. After you're done, you can sell the tools to another list member who wants to perform the operation. Or maybe you could organize a group buy. :^)