Claim: Sarah Palin holds mainstream American values
Truth: Palin supports book banning, has a reputation in Alaska for using racial slurs, and many more questions about her are still unanswered

As mayor of Wassila, Palin asked about having books removed from the town's library, and tried to fire the town's librarian when she refused to comply. Here's one story from the Atlanta Journal Constitution:

WASILLA, Alaska — Back in 1996, when she first became mayor, Sarah Palin asked the city librarian if she would be all right with censoring library books should she be asked to do so.

According to news coverage at the time, the librarian said she would definitely not be all right with it. A few months later, the librarian, Mary Ellen Emmons, got a letter from Palin telling her she was going to be fired. The censorship issue was not mentioned as a reason for the firing. The letter just said the new mayor felt Emmons didn’t fully support her and had to go.

Emmons had been city librarian for seven years and was well liked. After a wave of public support for her, Palin relented and let Emmons keep her job.

Read the full story here: Here’s the story about Palin’s book-banning try as mayor  

Also, a recent article by an investigative reporter from Toronto contains some explosive accounts from people in Alaska who know Palin best:

“So Sambo beat the bitch!”

This is how Republican Vice Presidential nominee Sarah Palin described Barack Obama’s win over Hillary Clinton to political colleagues in a restaurant a few days after Obama locked up the Democratic Party presidential nomination.

According to Lucille, the waitress serving her table at the time and who asked that her last name not be used, Gov. Palin was eating lunch with five or six people when the subject of the Democrat’s primary battle came up. The governor, seemingly not caring that people at nearby tables would likely hear her, uttered the slur and then laughed loudly as her meal mates joined in appreciatively.

Read the full article here: Alaskans Speak (In A Frightened Whisper): Palin Is “Racist, Sexist, Vindictive, And Mean” 

(note, this article is written based mostly on anonymous sources, because many people in Alaska fear retribution if they speak openly. however, the reporter in question has a reputation for accuracy, so we trust his integrity. if evidence emerges that this article is inaccurate, we will let you know here.) 

Claim: Sarah Palin opposed the "Bridge to Nowhere"
Truth: Palin supported the plan and promoted it within Alaska, even after gained negative national attention.
Truth: Alaska kept $230 million in taxpayer funds even through they haven't built the bridge
Truth: Alaska kept over $20 million in funds for the "Road to Nowhere"

Truth: Palin currently supports another bridge for which Alaska is seeking for $449 million.

The bridge project originally was written into the 2005 federal budget, but when it gained negative national attenion, Congress "killed" the bridge by removing the requirement in the budget that the money be spent on that project. But the money for Alaska stayed in the budget.

The money -- championed by Sen. Ted Stevens, R-Alaska, the powerful head of the Senate Appropriations Committee -- was earmarked to help construct a bridge between Ketchikan and Gravina Island in the Alaskan Inland Passage in the southeastern corner of the state. A ferry boat now provides transportation between the two points.
Lawmakers in the House and Senate decided to drop the project after it was derided by critics as "pork-barrel spending" on "the bridge to nowhere."
They also decided to ax $229 million for a bridge between Anchorage and the sparsely populated Knik area of Alaska. That span has been named "Don Young's Way" after Rep. Don Young, R-Alaska, who, as chairman of the House Transportation Committee, has helped send federal dollars to the bridge.
Under a compromise transportation spending bill, Alaska would still get the federal dollars -- but the money would not be specifically designated for the two bridges. As a result, Alaskan lawmakers and other officials would decide where to spend the money -- and they could opt to fund other transportation projects.

SF Gate - Alaska 'bridge to nowhere' funding gets nowhere

In 2006, Palin  told Alaskans that she supported the bridge while campaigning for governor, and when the phrase "bridge to nowhere" was first coined, she told people that she resented the term. In fact, she even posed holding a shirt that read "Nowhere, Alaska, 99901" in solidarity with the residents there.

So, while Palin is fond of saying, "I told Congress, 'No thanks,' on that 'Bridge to Nowhere,'" the truth is that by the time Palin became Governor, Congress had already removed the federal stipulation that the bridge be built. At the time, though, she was still championing the use of the funds to build that bridge.

A report for the local news in Alaska: 

Claim: Sarah Palin is a fiscal conservative who cuts spending
Truth: As both Mayor of Wassila and Governor of Alaska, Palin has overseen large increases in spending

The local press in Alaska know her best, so let's let them tell it like it is. From the September 6, 2008 edition of the Alaska News Miner:

FAIRBANKS — Gov. Sarah Palin has from the get-go pitched herself to Alaskans as a fiscal conservative, someone who can rein in government growth. Now, as the vice-presidential nominee of the Republican Party, she continues to present fiscal restraint as a hallmark trait. Conservative commentators and organizations have chimed in with praise in the days following her selection by Sen. John McCain as his running mate.

But state general fund spending has risen sharply in the 21 months since Palin took office. The budget she signed earlier this year for fiscal 2009 spent $5 billion from the state’s general fund — a 34 percent increase over the budget she proposed for fiscal 2008 not long after taking office.