Hmm . . . Magneto is easily my favorite X-villain, but I don't really think he'd match up that well against Sinister. Sinister has at times shown the ability to prevent mutants from using their powers (perhaps by some sort of psionic means). If he can do that to Magneto, Mags would be screwed. Magneto has also shown the ability to block mutants powers (by redirecting bloodflow away from certain areas of their brains), but I'm not sure Sinister even has normal blood, or that his blood contains iron (which Magneto uses to control it). Plus he has total cellular control, which could possibly prevent Magneto from controlling his blood.
Hmm . . . on second thought, if Sinister's ability to shut off people's powers is based on telepathy, then maybe Magneto could resist it. Magneto obviously has some ability to resist psionic attack, or Xavier would take him down in five seconds every time they meet. (Normally, it seems to be much more of a struggle). So if Magneto is too powerful for Sinister to stop him from using his powers or otherwise telepathically neutralize, then Sinister would be pretty much out of luck. His energy blasts aren't going to do squat against Magneto, nor is his strength. Magneto may not be able to actually kill Sinister (which seems pretty much impossible), but he could bury him under many tons of metal -- even shaping the metal into an air-tight container to prevent Sinister from oozing his way out. It seems like that would pretty effectively take him out of the fight.
So I guess I've come around to voting for Magneto (even though I was initially going to vote for Sinister).