Lets take GSP out of it for a minute and just look at Diaz.
No doubt that Diaz is one of the most exciting, if not the most exciting, fighter to watch in MMA. I can't remember the last time I watched a Diaz fight and thought he looked bad or it was boring....well, unless you look back at his fight against Sherk.
Here's the problem though. In his last 10/11 fight win streak (I think it's 11 but I didn't want to look it up) he has yet to fight ONE guy who has a strong wrestling base. That's not an opinion or me saying how the fight with GSP will go, but it is what it is. All we know is that Diaz does not have great wrestling and Sherk was the last fighter with a strong wrestling base to fight Diaz...and he lost...because he couldn't defend the takedown.
Take out the fact that Diaz is a great and exciting fighter when evaluating him as a real threat to beating GSP. The fact is we haven't seen his wrestling for the better part of the last 4 years, so who knows. I do know that I watched Cesar's interview after the fights and he said something along the lines of "Nick isn't scared to get taken down, he'll just get back up and he has great BJJ". That's a scary statement for a Diaz fan...because it sounds to me like Cesar is conceding already that GSP will take Nick down at will and is relying on getting back up at will or submitting GSP. I would say that's a very very dangerous game plan if you're trying to win that fight.