A major constraint in deployments of wireless sensor networks (WSNs) is the energy consumption related to the battery lifetime of the network nodes. To this end, power efficient digital modulation techniques such as On-Off keying (OOK) are highly attractive. However, the OOK detection thresholds, namely the thresholds against which the received signals are compared to detect which bit is transmitted, must be carefully selected to minimize the bit error rate. This is challenging to accomplish in resource-limited nodes with constrained computational capabilities. In this paper, the system scenario considers simultaneously transmitting nodes in Rayleigh fading conditions. Various iterative algorithms to numerically select the detection thresholds are established. Convergence analysis accompanies these algorithms. Numerical simulations are provided to support the derived results and to compare the proposed algorithms. It is concluded that OOK modulation is beneficial in resource constrained WSNs provided that efficient optimization algorithms are employed for the threshold selection.