Landlords voluntarily sign up their properties for Section 8. For landlords, especially in these tough economic times, signing a contract for Section 8 guarantees them a set amount of rent on the unit. Local Housing Authorities set rent within HUD guidelines based on fair market value. There are income limits for tenants, along with size guidelines (i.e. number of people per bedroom size of the unit).
The tenant signs a lease with the landlord, pays their portion of the rent directly to the landlord and the housing authority pays the difference to the landlord. Leases are for one year terms, and Section 8 vouchers are portable - meaning someone can get one issued in Mississippi then after a year, take the same voucher and move to California.
That being said, in an apartment complex the assumption is that every tenant, be they open market or Section 8, signs the same lease. If your sister is having problems with the neighbors she needs to take her complaints to the management of the complex, and put the complaints in writing. Also, she can send a copy of the complaint to the Housing Authority that holds the Section 8 voucher.
There are rules and expectations of Section 8 tenants, but it is up to the landlord to enforce the lease. Section 8 is a monetary assistance program, all the Housing Authority really does is verify that the tenant is eligible for the program, inspect the property to ensure it is up to HUD standards, and provide rental assistance for the tenant. Enforcing the terms of the dwelling lease is up to the landlord.
The point of Section 8 is to give people greater choices in assisted housing and to help move away from concentrated areas of all low income units.
Unfortunately, people are people, and sometimes you get crappy neighbors.