Well herding is just muted prey drive.

Muted just before the kill part. So it should look like chasing somewhat. What you are looking for or so I was told is some interest in the sheep and willingness to engage them. You can train them from there. If they have no interest in them or refuse to engage you really can't train them.
Rachel took Diva to get tested on sheep last year, it wasn't an official test but after sniffing and trying to eat a little sheep poop , she finally noticed the sheep and I guess went crazy. From what Rachel said at first she just chased them around but then started running for the head back and forth tying to cut them off when she realized it wasn't working chasing them. Rachel said at first it looked a lot like uncontrolled chasing/barking but then it started to change into a more herding like behavior. She was told Diva had a lot of instinct. Of course, no video.
We took Grizz and Jamie the next month. Grizz did pretty well, Jamie did ok but reserved like he does everything.
http://www.youtube.com/watch?v=XsEQT4yMY5Q
I really think it is neat to see Shelties do what they are meant to do.