The average halfling weighs 30-35 pounds. With that weight I would actually make a halfling a Large one-handed weapon that inflicts 1d8 subdual damage (in other words, a Large sap).
If wearing medium to heavy armour, I would allow the damage to be lethal. Spiked armour would boost the damage to 2d6 lethal as if the halfling was now a large morningstar or flail.
Of course, a halfling is an Exotic weapon. I would rule that, unless unconscious or helpless, that a successful grapple check would be required to wield a halfling as a weapon to reflect the need to keep the halfling moving so that centrifugal forces keep him rigid and suitable for use as a weapon.
I must borrow this thread for the Midnight boards where using halfling as weapons probably makes a lot of sense for certain orcs....