Ok, I believe I should be able to answer all of your questions:
1. Yes. By default routers are set to automatically give IP information to whomever connects to it's network. If you haven't changed any of the settings all she would have to do is punch in your code your router provides (depending on how you have it set) and she's on. Now remember if you set it to WEP 128bit, she'll need to enter a 26-alphanumeric code string or for 64-bit she'll need to enter 10. Same concept goes for the other encryption methods your router provides. If you have Automatic DHCP turned off on your router, she will need to enter some vaules into her Internet Connections Settings window (I'm assuming she's using windows) These values vary by manufacturer.
2. Have you asked about what she did (if she did anything to your router?) Who makes your router? (Flip it over and check)
3. You can have as many people connecting to the wireless router as your internet connection can hold. I wouldn't push it past 20 but two is no problem at all. Since your wireless router broadcasts through an omni-directional radiowave (2.3-2.5ghz) you can have more than one connection, along with it's ability to determine the difference between you connecting and her connecting as the modulation of said frequency is toned ever so slightly.
I hope I was able to help.~Mod Edit: To remove reference to post that was split away~ TMacK
Edited by TMacK, 03 September 2007 - 11:54 AM.