I had someone request a book that has writing/underlining.  In a textbook, this is okay, but I am supposed to PM her first to get her approval.

How do I do this?  I see no "PM" button, so it looks as if I have to accept the request, then PM her.  If she refuses, does she cancel the request, or do I cancel it?

Yes, you have to accept the request first. If they do not want the book, you would have to cancel the transaction. If they did, they would lose their place in line. In order to avoid getting the same person again when you repost the book, you could request that they temporarily set of an RC. That way you could decline it, and move on to the next person waiting.

Yes, the pm button doesn't appear until you have accepted the request.

For the full Textbook posting guidelines, see here (under the Pages heading).

Above posts are correct.  Canceling would be YOUR responsibility.  You'd need to accept the request and if they don't want it with the underlining, YOU would need to be the one to cancel the request, since you are not offering a "regular guidelines" book.  The Help Center says:

Member B posts a novel (fiction) that she used in a class - something that most people would NOT consider a textbook.

• Following the Book Condition Criteria for 'Swappability' at PBS textbook exception rules, she sends a Personal Message to the requestor when she gets a request, describing the book's condition.
• Chances are good that she will NOT get PM consent from the requestor to send the book with highlighting/etc.

• If the requestor declines the book in its condition, Member B will have to cancel the request and repost her book. It will go to the 'back of the line' for requests. (If it is a Wish Listed book, it will be offered to the same wisher and the sender will again have to cancel. She will have to wait for the wishing member to get a copy of this book from someone else before Member B can post her copy again.)