One of my favorite books and a very, very favorite scarf!
I was confused with this direction, too, when I 1st knit the scarf, this was my 1st charted pattern. You will learn that Annie Modesitt (the designer) is a genius! This is an increase st. you do just as it says, you see, you are purling before you come to this increase, and knitting after it, this increase allows you to not interupt the flow of purl and knit sts. Since you are purling as you come to the increase st your yarn is in the front of the needles, purl into the next st, but do NOT remove it, then position the yarn behind the needles to ready for the knit st. and knit into the same stitch that you purled into and then remove the 2 sts, you have a purl increase by the purl sts you have been knitting and a knit increase in front of the knit sts you are about to knit.
I'm not very good at explaining unless I do so face to face, so please forgive me if I've confused you, I'm sure someone more experienced will come along with more help if you didn't understand me (lol, I'm a hand talker, I have to show you what i'm doing rather than just type it!).
You will have fun with this scarf and it is GORGEOUS!!!!!!