HFMD is caused by a nasty little virus called coxsackievirus (type A). It is spread through nasal secretions, saliva and feces. The best way to try to avoid infection is through rigorous hand hygiene, especially after eating, doing diaper changes, using the toilet, sneezing, coughing, etc. It is most infectious during the first week of illness. Since this typically begins with a couple of days of flu-like symptoms before the rash appears, you can end up being exposed before you know what the infected person is actually sick with. Because the virus is primarily transported by hand contact from the infected person, anything they touch can end up being contaminated. This means toys, utensils, etc. The CDC site has a good set of fast facts you should take a look at:
Fortunately, the virus is self limiting (active symptoms last no more than a week, although the virus can hang around in the blood for months while the immune system is getting rid of it). Severe complications are rare and infection never becomes chronic.
However, your 3 mo-old has no immunity and may not receive it through your breast milk if you are not immune to the virus (have never been exposed to it, or do not generate an immune response to new exposure, or if the virus is a substantially different variant than the one you were exposed to originally). The biggest problem with an infant is that the mouth sores can be so painful that they prevent good feeding and hydration. Tylenol can help reduce the fever and pain, but if the baby becomes dehydrated, hospitalization may be necessary to administer IV fluids. This is also pretty uncommon.
Personally, I would be cautious of a visit by the exposed children. It would be best if your sister visited without her children, and she should wash her hands very well after leaving her children and again before entering your house or coming in contact with your baby (in case she has already unknowingly spread virus on other surfaces she or her toddler may have come in contact with, such as the car door, etc.) That way, if her children are shedding virus she is less likely to carry it into your home. Also, incubation of the virus before symptoms appear is from 2 to 10 days. So, if it has been at least 17 days since they've been exposed, they're probably clear and OK to visit(either they did not contract the virus or have cleared the prime infectious period). I would still insist upon rigorous hand washing, though, and I would avoid letting the 8 month old come in contact with your baby at all, since babies of that age spend a lot of time with their hands in their mouths! Also, don't allow anything the toddler might stick in her/his mouth (including hands) to come in contact the baby.
BTW, about 50% of kids with coxsackievirus have no symptoms, and symptoms in many others may be very mild. Sometimes a child will have only a fever and no rash or blisters, or the rash appears only on the hands and feet and never in the mouth or throat. For this reason, it can spread rapidly through daycares and nursery schools. It is theoretically possible for most of the children in such an environment to have the virus and never know it. If your baby is in daycare, he may have already been exposed to the virus and is immune to it. The problem is, you can't know. Because the virus is so mild (relative to coxsackie B), I don't believe an easy blood test is available. Tests are usually only done if a case is unusually severe and serious complications have developed. This involves testing for the viral DNA, which can be pretty expensive (several hundered dollars/test).
Sorry -- I hope this isn't too much information. At least it's given me a break from the hepatitis article I've been working on! I hope you find a way to visit comfortably with your sister.