UPDATE Sept 12: USA Today recently reported that Palin "did not ban books." Still, according to that same article, it's the same story reported by the Mudflats blog (see link above). To quote from the USA Today article:
Mary Ellen Emmons was Wasilla's librarian at the time. She told a local newspaper, the Mat-Su Valley Frontiersman, in December 1996 that Palin repeatedly had asked her about removing books from the library, but said Palin never mentioned specific titles, according to the Anchorage Daily News.
Palin has cast her questions about the library's policy, including at a 1996 City Council meeting, as theoretical. Her critics, including a city resident who attended the meeting, say the questioning was more direct.
"There was no way that I thought it was rhetorical," said Anne Kilkenny, who said she attended the meeting where Palin raised the issue but says she did not remember Palin's exact words.
In January 1997, Palin requested that the city's department heads, including Emmons, reapply for their positions. Though the censorship issue was not raised, some members of the community rallied behind Emmons and the librarian kept her job until she resigned three years later.
Read the whole USA Today story here: