In general you can leave it on during the day if you're going to be coming back to it from time to time. That is probably better than turning it off and on multiple times during the day. Then you can turn it off at night or other extended periods. Another thing to consider is security: if your computer is on, there is always the possibility that it can be hacked into. When it's off, you eliminate that possibility.
The other thing you can consider is letting it hibernate and/or sleep while you are away. There are power settings in Vista that let you choose how long it will wait before hibernating. (Sleeping draws some power and the computer is more "awake" than hibernating. Hibernating shuts down everything, but when you hit the power button you are right where you were when you left off, so the computer isn't booting up from scratch.)
I agree with your sister. Shut it down overnight, or when you know you'll be away for a while. But it probably doesn't matter much either way.
