I've been playing for a while and have read the rules thoroughly but I just noticed something tonight that I did not see before and want to clarify what I think I read.

During activation, you select Battle Stations for one of your ships. Now the way I've seen it played, you can use the token for both defense and attack all in the same turn. That is to say, if you are attacked, you select it to convert all of your BS die rolls into evades, and then when you attack you can use it to turn all of your BS results into hits.

However from what I just read, it states that you have to spend the token to do one or the other. Is this true? Or were we doing it right before?

You were doing it wrong.

You have to spend the BS token to gain the effect you state.

Not sure if it's true for your situation but I know many people see vids that include Sulu and get confused about the second part of his affect being a full BS or getting double use out of the BS token they have.

It is one or the other - that is why Janeway, who can get two BS tokens, is really good for both offense and defense.