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Sarah Palin is not a libertarian. She appears to favor laws governing how people can culturally live, and she seems unconcerned that the government can hold someone they deem a terrorist suspect in confinement without any judicial review.
On economic issues she's in favor of a Paulson type plan, while being unable to describe why (as her interview with Kouric shows). While I think it's possible for a libertarian to favor the Paulson type plan, I think they'd have to do so with the greatest reluctance and with a far better understanding of why it's needed than she has shown.
She may be a smaller government Republican than George W. Bush, but that's not that high a hurdle, really, and frankly Alaskan citizens have the lowest taxes and highest benefits (eg, subsidy) of any state in the union. She favored the "Bridge to Nowhere" originally, and even when she turned against it she didn't refund to the taxpayers, she kept them for state use. I think a true libertarian would have said neither the Congress nor the state of Alaska should be holding onto such funds.