If her roomate's machine has been compromised, or is hosting some sort of zombie-bot, the only machine that would be affected would be her roomate's.
There is only one situation where this might cause a problem for your sister:
If they're both on the same DSL or cable connection, any illegal thing her roomate's machine did (i.e. spam botting, participating on a DOS attack, bootlegging copyrighted materials, sharing kiddie-porn via P2P, etc.) would lead an investigator right back to the WAN IP address
on your router.
Depending on the circumstances, you could have your service shut off; possibly get a call from your ISP's security department; or receive a very unpleasant visit from law enforcement officials.
But this is all "worst case scenario" stuff - and pretty far fetched. I wouldn't worry too much about it.
If something very serious went down, I doubt your sister would ultimately be the person in trouble since it wouldn't be her machine that was causing the problem. But establishing innocence and dealing with skeptical security people is a hassle best avoided whenever possible.
If your sister is that concerned, the easiest thing to do would be to just order an additional DSL/Cable line and put
The Roomate (
hmmm...starting to sound like a movie title isn't it?) on a completely different router.
End to end data
transmission encryption (E2EE) is possible, but it's not easy to implement efficiently without additional hardware and some professional (i.e. expensive) assistance.
Data file or folder encryption however, is very doable with CryptainerLE or TrueCrypt. TrueCrypt is more suited to providing protection of files that aren't being transmitted. Think of it more as a strongbox. CryptainerLE is more suited for things you want to protect
and send to other people.
If you encrypt your files before sending them, you're about as secure as you can get short of working for the government. Just encrypt whatever file(s) you want to send, and let the recipient know what the password is, and you're set to go. Most apps allow you to create self-decrypting executables so that the recipient wouldn't need anything other than the password to unlock your file.
Alternatively, you could use a public-key/RSA solution like PGP, in which case you could encrypt/decrypt without needing to share passwords at all.
