From CNN.com news:
Attack on Palin, Or Common Line?

It wasn't the first time Obama used the line. In a phone interview with The Washington Post last September, he used it in reference to the situation in Iraq.

"I think that both Gen. [David] Petraeus and Ambassador [Ryan] Crocker are capable people who have been given an impossible assignment," Obama told the Post. "George Bush has given a mission to Gen. Petraeus, and he has done his best to try to figure out how to put lipstick on a pig."

Other politicians have also used the phrase in recent years, including Vice President Dick Cheney, Sen. Maria Cantwell of Washington state, Sen. James Inhofe of Oklahoma, Sen. Mitch McConnell of Kentucky, Rep. John Mica of Florida and Rep. Tom Tancredo of Colorado, among others.

Torie Clarke, a former McCain adviser, even wrote a book called, "Lipstick on a Pig: Winning In the No-Spin Era by Someone Who Knows the Game."