To start off with, tell your sister to change her password to her MSN account.
Now.... To your problem...
Go to "Start->Control Panel->User Accounts" and select her account from the list.... Select the "Delete this account" option.
To stop your system from displaying the Welcome Screen, go to "Start->Run" and type in "control userpasswords2" (but without the quatations). Untick the "Users must enter a username and password to use this computer" option and click OK.
In the dialog that comes up, type in YOUR username and password into both the fields below....(if you haven't got a password for this account, leave this field blank). Now click OK