Just got through our second game as a group. I love it so far,but ran into a question that i wanted to see if we played it right or not. With her Holy Rosary does it make trauma cards cost 1 threat when they had no threat cost to begin with?

Yes, trauma will cost 1 threat.

http://community.fantasyflightgames.com/index.php?/topic/43732-sister-mary/

Good we had a bit of an argument on that and that is how we ended up playing it much to the dissatisfaction of the keeper.