Congrats on becoming an aunt!! THAT'S exciting!! :)
WELL, there could be a few different outcomes.
Most common (or so I've heard)... baby is born, usually via c-section to accommodate the large(r) head, and within 48 hours has a shunt put in, which drains the excess fluid.
There are many, many causes for this, but not all are serious. Sometimes, wires just get crossed, the fluid is drained, baby grows into a perfectly normal kiddo.
Worse case, baby's brain has been severely compressed by the fluid, so baby ends up with some form of brain damage (could be as simple as sight or hearing issues, or as severe as retardation)...
Babies are resilient... they are so much stronger than we give them credit for. Those that are 'perfectly imperfect', are lovable just the same! They don't have to be 'normal' like you and I; each child, regardless of how they arrive, are blessings, and are born absolutely kissable and lovable and cuddly!!
Be there for your sister. She's probably freaking out right now. Just be supportive; be her rock... and give her a big hug for me!!
Everything is going to be exactly how it was meant to be... have faith in that :)