Hugs to your sister, that is horrible!
Water can be very hard to keep down with a stomach virus. I'd try a drink with electrolytes in it - you can get them at the health food store, or you can try Vitamin Water or even Gatorade if you can't find anything else. Small sips at a time to fool her body into accepting it.
The lack of water might cause a dip in her milk supply, but she should be able to regain that once she can stay hydrated. It might take a few days, but it will come back.
She should keep nursing. Her body will take what it needs for the milk, and the antibodies the baby gets from the milk will help prevent him getting infected too.
Since she is nursing, she needs to watch out for dehydration. She may need to see a Doc to get some meds to stop her from puking and / or get hydrated with an IV.
A lot depends on how long she has been puking for - if it has been just a day, she's probably still OK. If it has been days, then she needs to be careful about dehydration.