I don't think if Edgar beat Penn that it would be a bigger upset than when Serra beat St. Pierre. I think that Penn will win, but Edgar has proven himself against solid competition and earned the title shot that he is getting. His wrestling is better than Penn's and he does have very good hands while also being fast on his feet.
They both have something in common, they both convincingly outstruck Sherk so that leads me to believe that Edgar will manage to put up a better fight on his feet than Sherk did. I could see him having a similar game plan as Sherk, and that is trying to box with Penn. Edgar's good wrestling should be good enough to keep it standing for a while and I could see him possibly trying to use his speed to out strike Penn. I never said that I believe that it would work, though. I think Penn has superior hands, power, and i assume that he has more reach as well.
Penn has a great jab and he will probably be looking to throw that a lot to keep the smaller Edgar from getting inside. Penn also has a good chin and with Edgar's lack of power, I don't think that Penn will be too worried about getting tagged.
I think that this fight may be fairly competitive on the feet with BJ Penn getting the better of the exchanges. With his advantages to go with that, it wouldn't surprise me if he eventually hurts Edgar and manages to finish him on the ground with a submission if not a technical knock out.
This should be exciting in my opinion.