I thought that Sri Lanka would beat England but I'm not claiming any bragging rights after the close result in the Super Eight match which the Lankans won by 2 runs from the last ball of the game.
It was , as many of the best one day games are, a low scoring match (by contemporary standards). Sri Lanka, sent in, reached 5/215 from 45 overs, lost 5/20 and were all out for 235 from the last ball of the 50th over (Upal Tharanga 62/103b, Mahela Jayawardene 56/61b, Sajjad Mahmood 4/50, Andrew Flintoff 3/35).
England lost Michael Vaughan and Ed Joyce cheaply, but Ian Bell and Kevin Pietersen, again, steadied the ship. Bell was, again, run out (how many times has this happened to him in crucial situations?). 3/101 from 25.2 overs became 6/133 from 33.3 overs as the middle order crumbled. Paul Nixon 42/44b and Ravi Bopara 52/53b put the chase back on the rails using a combination of orthodox and (especially Nixon) unorthodox methods, but could raise not quite enough steam to get their team over the line. Bopara was bowled by Fernando trying to win the game from the last ball.
I'll refer you to the Cricinfo match package and Scorecard for more information and comment about the game.
As for the future prospects of the two teams, England have a tough task to qualify for the semi-finals. They're not playing badly at present, certainly not as badly as they were three months ago in Australia when they flummoxed their critics, including me, with a form about turn (President Bush might have called it a surge) which gave them the tri-series trophy. So they shouldn't be written off yet.
Sri Lanka are doing pretty well everything that their supporters could ask of them. They're batting, bowling and fielding well enough to look a likely contender to proceed through the semi-finals to the final. I'll keep my powder dry and not say any more than this for the time being.