Having "visa" as the first translation on the drop down from "visto" isn't helpful to translating this. I should have gone with my gut that it was "I have seen"....
I translated as "I saw her looking" and was marked as wrong. I thought the past participle is always singular masculine, but there seems to be an exception. I found the following explanation (in Italian): http://it.answers.yahoo.com/question/index?qid=20111023121705AAV8IUQ
Here's my attempted summary. (Hopefully I understood correctly.) Whenever preceeded by pronouns lo/la/li/le, the participle must agree with the pronoun. However, for mi/ti/ci/vi, the agreement is optional.
I am curios, (for the listening/transcribing version of this question): Is "lo visto guardare" also a valid Italian sentence? And, if so, is there an audible difference between "lo" and "L'ho"?
visto doesn't make sense by itself, that would mean I seen him looking, instead of I HAVE seen him looking.