First things first, that single Administrator account.
I see this is a custom built account your sister has had done, and it seems there is only one main account. This will be XP's own System Administrator account. The Guest account can be discounted, (excuse the pun).
It is advisable for your sister to create a new Admin account with full privileges for her own use. The Administrator account will still be there, but if the system is set up to show a Welcome Screen when it is turned on, (booted up), that account will be hidden from view. Why do this? Accounts, (or User Profiles), can get corrupted, and if the only Administrator account becomes corrupted your sister will be unable to log in to Windows with Admin privileges. Having two full Admin accounts is a safeguard. If you set a password, be sure to remember it. perhaps write it down for now, but don't keep that piece of paper lying around and destroy it as soon as possible.
You can give the new account any name you like, (my own is Mark Flaxman), and when created it will also create a new My Documents, My Pictures, My Music, etc folders. Your sister, (or you), can then transfer any documents, photos, music, etc to the new My Documents folders as you both wish. I would 'copy' them first, rather than 'move' them. That way you can test that they all copied correctly, and only then delete the old files.
To transfer any files and settings to the new account I would, first of all, before creating the new account, use the FAST, (File and Settings Transfer), Wizard, to backup those files and settings from the old account to a convenient place on the hard drive to be imported into the new account when it is created. It is available from Start > All programs > Accessories > System Tools > File and Settings Transfer Wizard. Use Fast again to import these files and settings to the new account.
FAST is a powerful Windows tool, but it does not transfer passwords and usernames, eg internet logon details, (dialup), or email username and password. However there is a useful description of FAST at www.aumha.org, and this has very useful tips around this, as well as other good advice.
If you decide to use FAST I would not use it to backup then import the My Documents folder and sub-folders. Otherwise the problem with the My Pictures folder may transfer over.
By the way, that Address bar problem. The Address toolbar can be dragged across and down below the icons toolbar. If it does not move, go back to View and make sure the "Lock Toolbars" is not selected.