Are you specifying ip's manually or are they all DHCP?
I personally found vista easy to connect to my router.. But there are a few things i found that i couldnt do with vista i could with xp.. The router has to be broadcasting the SSID so others can see it.. I found (only router anyway) if i disabled that feature (so others cant see my SSID) i lost connection..
Try pinging www.google.com to confirm if you have outside access. But i guess thats not working..
Few others i can think of is, is there any security on it.. ie WEP WPA key you need to match up to the router to gain access? Do you need to forward any ports for that laptop?? With mine.. i have to specify my laptop say 192.168.1.60 to allow it access. That also guess around your sisters laptop taking your IP.. just like an address.. I find its easier ME telling them what IP to use then DHCP as we have 3 machines hooked up the router.. For some freak reason my laptop wants the IP my mums laptop is working on. it will cancel both out.
Its really hard to diagnose the prob to be honest without being sat in front of the machine ..