Rashi was alluding to BT Yevamoth 65b, which is below (click on the image to view the source online). The end of this passage from the Talmud cites an excellent example to illustrate the point. Scripture records the thoughts of Sarah, who had considered Abraham as old (Gen 18:12), but the Angel of the Lord articulated her thoughts out-loud (to Abraham) quoting her instead as saying that she (not Abraham) was the one who was old (Gen 18:13). Sarah was indeed old, and so the "paraphrase" by the Angel of the Lord was truthful and relevant, but not unkind to Abraham. The "way of peace" therefore is not lying, but remaining truthful and relevant while not yet being unkind.
BT Yevamoth 65b
R'Ile'a further stated in the name of R'Eleazar son of R`Simeon: One may modify a statement in the interests of peace; for it is said in Scripture, Thy father did command etc. so shall ye say unto Joseph: Forgive, I pray thee now, etc. (Gen 50:16)
R'Nathan said: It is a commandment; for it is stated in Scripture, And Samuel said: 'How can I go?
If Saul hear it, he will kill me', etc. (1 Sam 16:2)
At the School of R`Ishmael it was taught: Great is the cause of peace.
Seeing that for its sake even the Ho One, blessed be He, modified a statement; for at first it is written, My lord being old (Gen 18:12), while afterwards it is written, And I am old.
In summary, When Jacob died, the brothers thought that Joseph would finally seek revenge. That is, they thought that Joseph was waiting for his father to die before settling scores with his brothers (and in this way Joseph would be avoiding any heartache for his father Jacob). So the brothers presented Joseph with statements made by Jacob, which were creatively modified by them "in the way of peace" so as to ensure that Joseph would not harm them.