Lady Yasmine lives in the north-western part of Valentown in a mansion out of the main area of town. To begin her side quest, you must first complete the required story objective of restoring the Love Engine so that everybody in Valentown is happy again.
When she is willing to talk, speak to her and accept the quest. We will now need to keep our eyes peeled for Lady Yasmine's missing novel. As the game progresses, you will travel to Kairo and gain information about Diamond's family. After returning to Hallowtown, you will encounter Jack. After solving the puzzle at the Catacombs and meeting with him, you will see a cut scene and take control of a red-headed woman in a bizarre looking cartoon world.
You must solve riddles in order to reveal the right path. When you get to the 6th signpost that reads "The sky burns when the soul is blue," look to the right and you will see a small body of water. Head this way, and you will see a glowing item on the ground.. which just so happens to be Lady Yasmine's novel! Be careful though - if you venture too far to the right after picking up the novel, you will have gone the wrong way, and the game forces you to the beginning of this area.
After traveling back to the Dream World, you will find yourself in Hallowtown. You can use the Memory Teleportal here to return to Valentown and return Lady Yasmine's novels. Or, you can do it later, when you're ready to complete other quests in the area. Yasmine will reward you with a Pink Nugget.. which is also required for another side quest in Hallowtown.
Upon returning her novel, the achievement will unlock.