The only improvement of any sort I see on the Cavs is at the 2 spot, where they picked up Parker and Moon. However, with Delonte around, there's really only going to be room for one of them in the playoff rotation, so to count both of them as improvements is somewhat shortsighted.
As for Shaq, for all the slack the C's get about their aging core, this guy is older, bigger, and has much more of a history of breaking down. Furthermore, his statistics were horribly deceiving last year. In Phoenix's system, he got easy shots and had more opportunities for rebounds (given the pace they chucked it up). If he played as well as his stats made him look, the Suns would've made the playoffs.
Moreover, if we're comparing what Shaq and Sheed mean to each team, Shaq is supposed to elevate the Cavs from pretenders to contenders. Sheed is supposed to replace what PJ Brown did. Shaq likely won't meet that expectation. Sheed on the other hand, even if he does slip some, will likely exceed what PJ did.