I don't think Houston is interested in just dumping Battier. The only scenario I see them giving him up for Sheed (and a pick) would be if they needed Sheed's contract and possibly the pick as part of a larger package for them to get another star. There have been a lot of rumors of them looking to make a big trade, and Sheed could help them pull it off, depending on the team they are dealing with. My favorite package that I have come up with so far would be something like this:
Boston sends: Sheed, first rounder
Boston gets: Battier
Houston sends: Battier, Brooks, Jeffries, NY 2012 first rounder
Houston gets: Granger, TJ Ford
Indiana sends: Granger, Ford
Indiana gets: Sheed, Brooks, Jeffries, Boston 2011 first rounder, NY 2012 first rounder
Houston gets their star to put with Martin, Scola, and Yao. Indy saves a ton of cash, and get a young, talented PG, and a couple first rounders. And of course, Boston gets the perfect wing off the bench.