how to file a suit on someone who didn't hold up their end of the deal?

Go down to the small claims court. Look it up in the phone book or on the web. They'll give you a form on how to file a small claims action. You'll pay a fee and you'll have to serve the complaint on your sister's co-worker, which may mean hiring the sheriff or a process server to bring her the papers. The papers will say why she owes you, and how much. The court will schedule a date for the hearing, and the two of you will show up and tell your stories, and the court will render judgment.

That's the basic idea. It varies a little bit from location to location but the principles are the same in small claims courts throughout the country.

Not legal advice as I don't hold Texas licensure. If you need legal advice, consult a Texas lawyer.

Good luck.

As Mr. Taylor indicated, filing a claim small claims court is yuor best bet. In Harris County, small claims are heard by the Justice of the Peace courts. You can find the JP court in you precinct on the web. Also on the web will be the form pleading you need to fill out to file. Simply fill out the form, go the JP court, file the form with the clerks office and pay your filing fee. You wil be notified of your trial date about 6 weeks after fiing.
Good luck.

I agree with my colleagues - you should file a small claims action against her. The Harris County website can give you information on how to get started: http://www.jp.hctx.net/civil/default.htm