My older son was 19 months old when my younger son was born at home (you can read the birth story here if you have any questions about some of this: http://womantowomancbe.wordpress.com/2008/05/30/seths-bir..., and it was no big deal. My labor was 24 hours long, but the contractions were every 7-15 minutes. Most of the time I was completely alone (waiting for "real" labor to start, I didn't call the midwife, nor did I want to disturb my husband while he was asleep), yet that wasn't a problem to deal with my toddler. He was asleep for a large part of it (slept probably 12 hours at night, and took a nap of another couple of hours starting at noon), and when he was awake, the ctx were so widely spaced that I could easily deal with him and then be somewhere else when another one hit, or just work through it moaning softly. He loved watching "Little Bear" and I let him have a marathon -- watching as many as he wanted.
However, everybody's experience will be different -- you may have a short overnight labor and your daughter will sleep all the way through and wake up to her new little brother/sister. But I would have somebody at your house or at least "on call" to be able to watch your child, because some kids get a little freaked out by all the commotion (having a stranger [the midwife, assistant, doula, whoever] in the house, mommy making funny noises, walking around in little or nothing, etc.) and they may become needy right when you require all the attention from the midwife and your husband. In fact, my first midwife had that as part of her policy -- that if the woman had other children at home, she *had* to have somebody devoted just to them, so they weren't too much of a problem -- in the way, demanding attention, getting into the birth supplies, etc. Although your daughter may or may not be that way, it's still a good idea to have somebody there just in case. Otherwise, there may be a time when your husband will have to take your daughter somewhere else (even if it's just into the other room and stay with her, but possibly take her out of the house), and then what?
And I'm echoing the other suggestions that she watch birth videos (youtube has lots of homebirth vids, which I would suggest instead of any hospital-birth ones, because it will look quite different to young eyes to see only women trussed up in stirrups and sterile drapes on her back on a table, compared to the typical home-birth setting of a woman birthing under her own power, in her living room or bedroom). Make sure she sees videos of women having contractions (so many hospital-birth videos show only drugged women who do not show reactions to contractions), and "translate" it for her -- "Oh, look at this lady, see how strong she is, and how she has to close her eyes and push really hard and make noises to help her get the baby out" sort of thing. Get her familiar with the sights and noises, so she doesn't flip out.
And if she doesn't want to be there, that needs to be an option for her -- she shouldn't be made to feel like she has to be there.