Oh my, either you have a fairly large house or you've got way too many people under one roof. Sorry to hear of your situation. My first reaction upon reading your post is that you must be a very nice person. To agree to take in your sister In law and your sister and her 2 rugrats isn't an easy decision.
I dont't know the nature of your relationship with your sister, but I think it's not so much that she doesn't care/love her children. Perhaps she's still sore after the divorce; maybe too stressed and unhappy to have to depend on her sister; maybe the relationship with her ex ended so badly that her kids keep reminding her of him. Perhaps what she needs is professional counseling to help her sort out her emotions.
As for your sister In law, it does sound like she's really overstepping. But your husband must be very close to his sister (or very protective of her) to want to take care of her like that even though she obviously doesn't need it. I think maybe your best bet would be find her a man hahaha... No, seriously in my opinion, she'll only leave your house if she gets married or if she has a fallout with your husband. Since neither seems very likely, I guess you might have to live with it. Just come mummysg every now and then and complain a bit to let steam ... :P