Nothing is black and white in MMA. He has ways to win the fight. One thing is that GSP is coming off of a torn ACL, and may never be as explosive as he once was. He might be, but maybe not.
If I were to breakdown the match up from my slightly biased perspective it would go something like this. GSP's wrestling is the best in the weight class, maybe in any weight class, and Diaz doesn't have the best take down defense in the world. I've seen a lot of fights where Diaz's stand up will be sub par because he is more worried about stopping takedowns than he was throwing his strikes (see: the Sean Sherk fight). GSP has developed into a 'cautious' fighter that uses his wrestling, stays in his opponents guard, and grinds out victories (I said cautious because I'm nice. Some people might even say boring). The thing about taking down Nick and trying to hang out in his guard, is that Nick is one of the best BJJ practitioners in all of MMA, and he has finished guys in his guard. He is overall just a lot better than GSP on the ground, so if GSP's plan was to try and lay on top of Nick it would be interesting to see what would happen. GSP also tends to wear out his opponents while laying on top of them, and Diaz isn't one to wear out, which is taking away another out for GSP in the fight.
On the feet I would say Nick has the advantage, but like I said sometimes when he fights wrestlers his stand up will suffer because he is more concerned with stuffing shots than being aggressive and working his hands. Another thing to consider is that GSP is trained by Greg Jackson, the same cocksucker who constructed Carlos Condit's 'gameplan' of avoiding the fight with Nick, so he knows how to put together a chicken shit routine and have his guy win a decision against Diaz. Because of this, I would go ahead and favor GSP to grind out a boring 25 minute decision against Nick, while giving Nick maybe a 15-20% chance of submitting him, unless Nick came in with some sort of master game plan, which he isn't known for doing. It sickens me to say, but GSP is the best WW in the world, and while Nick might be the best match up for him skills wise with his striking and ground game, with Jackson in GSP's corner turning it into a battle for points on the judges score cards rather than a fight, it is tough for anyone to beat the guy.