That's what she told Glenn Beck and Sean Hannity and what she wrote on Facebook:
"Yes, that Joe McGinniss. Here he is – about 15 feet away on the neighbor’s rented deck overlooking my children’s play area and my kitchen window."
It really bugged me that I couldn't remember seeing a kichen window on that side of Palin's property, so I sifted through my files and found the window! But it has a venetian blind that appears to be permanently down. These photos were taken on several different occasions (click on pictures to enlarge):
Sarah Palin is technically right, there is a window 15 feet away from the house nextdoor, but the deck faces the lake, not that side of her property. There might be a window on that side of the neighbour's house, but Joe McGinniss would need to have X-ray vision to see anything.
Sarah also made a remark about Piper's bedroom window.
"Wonder what kind of material he’ll gather while overlooking Piper’s bedroom, my little garden, and the family’s swimming hole?"
Piper's window is too high to be seen from the deck, which, as I said above, is not directly opposite that side of Palin's house.
Here's a nice article about Sarah Palin's fence and how it may be in breach of Wasilla's municipal codes.