The article cited was about a 63-page strategy document that her 2006 gubernatorial opponent, Tony Knowles, wrote up about her. The document can be accessed here: http://www.politico.com/static/PPM106_palin_doc.html
I took these quotes directly from the document.
Palin Asked City Librarian About Censoring Books, Insisted It Was ‘Rhetorical.’ In 1996, according to the Frontiersman, Wasilla’s library director Mary Ellen Emmons said Palin asked her outright if she could live with censorship of library books. Emmons said, “This is different than a normal book-selection procedure or a book-challenge policy. … She was asking me how I would deal with her saying a book can’t be in the library.” Palin said in response, “Many issues were discussed, both rhetorical and realistic in nature.” [Frontiersman, 12/18/96]
The document cites the newspaper Frontiersman. I don’t have access to their archives. Can anyone find the article and get a direct quote?