I'm with the majority here. Ultimately, Sis's kids are her responsibility and not the OP's.
Reliable babysitters are a blessing, and free reliable babysitters are even more so ... but Sis's kids are still her responsibility. Now and then, even the best babysitter has to cancel at the last minute, due to illness or personal emergency or even (as in the OP's case) a weird scheduling hiccup. Most parents understand this, and realize that they'll occasionally need to cancel their own plans as a result. Them's the beans.
If I hire a babysitter, I'm totally within my rights to tell her what I expect of her in exchange for what I'm paying -- cook the kids' meals, wash the dishes, cut the dog's toenails, whatever. (Likewise, she's equally free to decline the job or ask for more money if she doesn't like what I'm offering.) However, if a friend or relative volunteers to babysit my children for free, that's a gift. If I had a free sitter like this, and s/he regularly flaked out on me at the last minute, I'd probably stop asking her to sit (at least for things where a last-minute cancellation would be a problem) -- but as she wasn't obligated to provide me with free child care in the first place, I can't see straining the relationship just over this. And I certainly can't see getting bent out of shape over the OP's single honest mistake -- I'd be too worried that this would spell the end of my free babysitting!