When conservatives speak of "liberal fascism", they are presenting the idea that liberals think they know what is best for everybody else. While we shouldn't buy into their arguments, they make a point.
I'm watching cspan right now. They are airing a live press conference called "Video Game Report Card" with Democratic Senator Joe Lieberman and Rep. Betty McCollum. Not only is Joe whining about sex in video games, he also managed to bring up the NBA brawl, desperate housewives, and Janet Jackson's breast.
As a party, I don't understand how we can condemn the Republicans for being authoritarian and not respecting free speech while at the same time, making our own brand of "liberal fascism". In my opinion, the party should be taking more libertarian positions on issues like this. By using language like "personal responsibility" and emphasizing the fact the parents should take care of children, not the government, we can pick up moderate Republicans who are fed up with the government declaring war on the American people.
EDIT: I posted this in the comments but I thought I should add it up here.
When I used the phrase "liberal fascism", I didn't mean it literally. Many of my libertarian/conservative friends use the phrase "liberal fascism" to describe when liberals think they know what is best for everybody else. I hope I didn't offend anybody and I would never compare Lieberman to a real fascist. That would certainly not be tasteful.