I agree with the posters who write that they read aloud what's on the page. My first thought is that to do anything less would be to bowlderize the text. I'm not sure I'm entirely consistent in that thought, though.
With my students, the most objectionable language seems to be that which, in their eyes, violates the one of the first Commandments ("Do not take the name of the Lord in vain"). I mostly teach 20th-century American literature, and I'm more aware than ever just how often modern iterary works include phrases that many people find offensive on religious grounds. I like to refer to the text frequently in class, and I don't shy away from any words or phrases, but I also try to make sure that students are never expected to say things that they find objectionable. I tell students that if they are reading a passage aloud in class, for example, and don't want to say a word or phrase, they don't have to. I won't skip anything when I'm reading aloud, but who am I to say that they can't.
On a side note, I'm not a big fan of the whole idea of authorial intent. (A number of posters have named authorial intent as an item of central concern here, so my closing comment is not off topic.) I know that I use language all the time in ways that I don't fully control or fully intend -- or even fully understand! -- and I'm sure that even the most accomplished authors do the same. We usualy don't have access to the author beyond what's in the text itself, so it' s often a logically sound move to avoid speculating about authorial intent and to focus instead on the text and on our reception of the text.