Close fight but Sherk did win IMO. Sherk was like a much faster version of Jake Shields in that his stand-up is non threatening/does virtually no damage but is somehow very effective at throwing people off. However, unlike Shields, Sherk had the lightning fast takedowns to match so his striking really complimented his wrestling to create almost seamless takedowns where the opponent doesn't have time to even think about sprawling. GSP is the only other fighter I have ever seen who could do that so effortlessly.
You can argue that Diaz did more damage but on points, Sherk won this. It's a shame he was around before the lighter weight classes took off because Sherk would have an absolute field day with all of the strikers in modern day.