If it's not true, and she wasn't there, I'm sure the Palin camp will be demanding and receiving a retraction from the NY Daily News, forthwith. If no retraction is demanded, or given, I'm inclined to believe it.
Finally, the Daily News just like the Post, doesn't frequently (if ever) publish surreptitiously obtained photos, like something shot with a cellphone. They usually only use agency (professional paparazzi) photos, like the one used in the story. If such pictures do exists, they'll probably eventually show up on the purely internet-based gossip sites, like Gawker & TMZ.
No, but blogs and other sites do, and so far I haven't heard about any photo being passed around on the internet. Time will tell.