We changed our words when our kids started repeating the bad words that would come from our mouths sometimes. Instead of sh!t, we would say "jiminey the crickets". Instead of "move a$$hole" we would say "move dope-a-saurus". Things like that. Not that name calling is okay, but in my defense I learned to drive in Boston :).
I also tell my kids that using curse words shows a certain level of decrease in intelligence. Sorry, but if you aren't smart enough to find another word to use, you must not know enough words. Curse words are never necessary. I did drop a few yesterday when I was MAD, but my kids rarely hear me curse and both of my boys sat stunned. I apologized, and made no excuse for my words. I made a mistake.
People make mistakes, kids say things they shouldn't just like adults, but tell your daughter WHY that word isn't good to use and she will stop. I don't think a punishment really works because then it gets attention.