This is going to be a pretty hard battle unless you know the trick.
The youtube video posted in the other solution is helpful but after trying to replicate it for half an hour with very little success the following trick worked for me on my first try.
After the start of the level lower the terrain in two tunnels/pipes, run through them and enter the large room containing Sheridan. Follow the same path as described in the video above, follow the left side of the room, lowering the terrain. Here is the important part...jump onto the ammo box with your feet facing forward. Apparently this is a glitch in the game where Sheridan absolutely cannot reach you.
He runs right up to you but will not be able to hit you. Shoot his groin and face until they turn red. Each time you finish one of these areas he will summon pillars to recharge his health. You need to destroy these pillars. Some people recommend using the Black Widow you found at the beginning of the level to destroy the pillars. However it took me so long to aim properly and detonate that Sheridan would always regenerate. I recommend using your SMG instead. This weapon will destroy even the furthest pillars within only a few shots.
After you've done this twice, it's time to destroy Sheridan's back. Aim slightly below his left eye/head. He will summon creepers after every three stomps (it varies slightly) where he will expose his back to you. Keep firing at him and you can beat this level without ever even moving from the ammo crate.