I have heard it used by some people e.g. Jacque Fresco.
For example here: http://youtu.be/COei3ga-HH8?t=6m14s
I know that people understand the meaning of the word "insane", but what about an average Joe and his understanding of the word "unsane"?
There are just 2 records in the Corpus of Contemporary American English showing unsane and 3,760 showing insane. The figures in the British National Corpus are 1 and 369. I think we might be able to draw some conclusions from that.
It is a legitimate word, listed in OED, and should be understood by a native speaker. Much like the word unfact.
That said there is not a lot of rationale to prefer it over the commonly used alternatives.
I expect all English speakers to understand sane and insane.
Although you might be able to find unsane in very large dictionaries such as the Oxford English Dictionary, I would not expect many English speakers to be familiar with it. I imagine most speakers would understand it as a novel combination of un- with sane (meaning "not sane"). I would also imagine that it might take a moment to understand--although I can imagine some circumstances where it would be readily understood, particularly when contrasted with sane and when the prefix un- is stressed:
But I wouldn't expect many native speakers to invent this word. Prefixing un- to sane is probably blocked for most speakers by the existence of insane. I think that anyone who did (re-)invent this word would be suspected of wordplay.
Barrie England's answer gives the result counts for insane and unsane in The Corpus of Contemporary American English (COCA), which I'll repeat here:
I decided to check those two results. Neither uses unsane as discussed here; they're both references to the band Unsane. So it's really 3760 to 0, which is a pretty big ratio. Unsane is nonstandard and is essentially never used. Avoid, avoid, avoid.