I asked Ted Vaden, the public editor for the N&O, whether editors at the paper considered running the full word in the quote or, on the other hand, simply paraphrasing what the witness said. Here is an excerpt from Vaden's response:
John Drescher, N&O managing editor, said editors had several discussions about whether to publish the vulgarity. "The consensus was that readers should know what Nifong said, according to Himan, and that the use of the f-word spoke to the force of Nifong's statement," Drescher said. "We also thought spelling the word out would be too profane."I am willing to go along with this compromise. It is certainly better than what I have seen in the N&O before, awkward constructions like this: "You know we're [expletive]," he said, using indelicate language. Masking the word in the video clip, however, seems unnecessary. A "not safe for work" warning at the link to the video would suffice.
UPDATE: Drescher elaborates here.