I think the best way is to override SimplePie_Item's "get_title()" to have it filter the bad words, making it transparent for the user while retaining the integrity of the original source data just in case. Repeat for "get_content," etc.

<?php
// override SimplePie_Item
class SimplePie_Item_filter extends SimplePie_Item
{
	function get_title()
	{
	    $title = parent::get_title();	
		if(!$title)
			return null;
	    $title = filter_bad_words($title);			
		return $title;
	}
}

$feed = new SimplePie();

// tell SP its got class
$feed->set_item_class('SimplePie_Item_filter');

// mitt romneyyyyy
$feed->init();

// smoke it with a filter
function filter_bad_words($title)
{	
	$evilwords = '(microsoft|riaa|mpaa|osama|putin|circularreferences|memoryleaks|pita|rubyoncrack)';
	$pattern = "/$evilwords/is";
	$replacement = '';
	$filtered = preg_replace($pattern,$replacement,$title);
	return $filtered;
}
?>