The Paladin Sword is a Two-Handed Weapon for Swordsmanship practitioners. It is one of the few weapon classes that are uncraftable.
With the exception of The Redeemer, it never made it's way into the game aside from a display at the Vesper Museum.
For a while, an exploit allowed players to obtain them using an Imprisoned Dog. This exploit was eventually fixed and all the illegally obtained items vanished.
They can have their durability increased, via Powder of Fortifying, to a maximum of 255 and can be dyed with Pigments of Tokuno.