So what is redaction?
To redact is to to put into suitable literary form; revise; edit. In the world of SharePoint, in many cases, you may want to redact, or blackout confidential information and protect it from disclosure. There are several types of SharePoint redaction applications, and most process files outside of SharePoint, and then post to libraries. Typically this is the method as you want to process files, and then post them to a publicly available site as a redacted copy.
Redaction requires some type of OCR Software to do optical character recognition and convert images to text to search for redacted terms.
PSIGEN has a great tool for redaction of scanned files, and will convert them to redacted TIFF files for presentation in SharePoint.