So, after I got restoration to 100 I went and did the quest to get the master spell (Bane of the Undead)... is that it? There isn't anything else? I read that there is a spell called "Guardian Circle" but where do you get it? Colette does not have it.

Go wait at another location for 48 hours. She should restock in that time and the book should be available. If its not then that does sound like a bug - are you on a PC or a console?

She just doesn't have it at all... I've tried everything. I'm on PS3 so I can't use console commands :\

Okay, I fixed it. I'm not sure what triggered it, but I loaded my game back to before I did the quest. Then right after I did the quest, I waited 48 hours (while still in the Midden). Then I exited and fast travelled to Whiterun, waited 48 hours, fast travelled back, waited another 48 hours, and she had it. I'm not sure if reloading fixed it or the fast traveling around... because previously I waited a week while standing next to her and she still didn't have it.

I also didn't reequip my gear (so I was naked) or use my new spell this time, no idea if that mattered at all.