I had a 4-night stay here last week and was extremely impressed.
I had a BRG of ~AUD180 approved for the 4P before it re-flagged to Hyatt, and was subsequently given the choice of having my reservation moved (at the approved rate) to either Westin or Sheraton. I read the property threads and asked a couple questions -- no strong support came forward for either hotel, so I prepared myself for a mediocre stay. To my surprise, what I experienced was quite excellent; this is perhaps the best Sheraton I ever stayed at.
I arrived early in the morning and was greeted by a very friendly front desk agent. The duty manager came out to say hi. I was upgraded to a very nice parkview suite, where a bottle of wine, some fruit, some chocolates, and a welcome letter had been set up.
The breakfast at the restaurant was excellent, with high-quality items and a good selection. The temporary club benefit in the evening was a bit shaky -- some nights were very busy, and I found myself seated in the business center. The food selection was excellent -- oysters/shrimp/seafood/sashimi, a salad bar, various sandwiches, hot finger foods, fruit, and desserts. I don't know if this is their regular selection, or if they improved it to make up for the lounge closure -- in any case, it was a very impressive spread.
I'd never stayed at a Starwood property in Sydney (only the IC and PH), but I wouldn't hesitate to return to the Sheraton!