Mrs. Dalloway is an excellent novel and just so happens portrays a sexual attraction between two women. It was banned for that simple reason. In literature it is considered a masterpiece and was written about quite elegantly in Michael Cunningham's The Hours. In addition, the film starring Meryle Streep is called The Hours too, featuring the modern day Mrs. Dalloway representative, Meryl Streep.

Mrs. Dalloway was banned in some communities because of the homosexual attraction of Clarissa to Sally at Bourton.

"Then came the most exquisite moment of her whole life passing a stone urn with flowers in it Sally stopped; picked a flower; kissed her on the lips."

Mrs. Dalloway was first published in 1925, an era not exactly known for its openness to "alternate lifestyles."  It joins a list of books such as Huck Finn, The American Heritage Dictionary, and Catcher in the Rye.  All in all, banned books are often among good company.

You have to keep in mind that there is no one organization that is going around telling you that you can't read something.  The organizations that are doing the banning are usually isolated school districts across the country and small town libraries.  A book banned in a library in Evansville, Indiana, might be freely available in the library a few towns over.  Banned books in America can create a lot of media stir, but the impact of banning a book has little effect on its popularity (and if anything, actually helps sales!)