The sine qua non of any "team of the decade" is championships. Championships means sport titles, not conference titles or pennants, not most times with the best record, not division titles (although these factor into ties), not best record of the 10-year period. The Lakers are the team of the '00s in the NBA because they won 4 titles, San Antonio (with a better overall record) won 3. The Stars aren't in the mix for NHL team of the decade for the '90s despite various President's Trophy wins (best record) because the Penguins and Red Wings won more Stanley Cups.
In baseball, the Team of the Decade in the World Series era has been clear cut in seven of the ten decades to date. Here's a list, along with best team (to win the WS) and honorable mentions:
1900s = the Cubs (2 titles, 3 pennants including the WS wins) of all teams. Honorable mention = Pirates (1 WS, 2 pennants), Tigers (3 pennants). Best team = 1909 Pirates (110-42) because the '06 Cubs (116-36) lost in the Series.
1910s = the Red Sawx (4 WS). Yuck. Honorable mention = Philly A's (3 WS, 4 pennants), Giants (4 pennants). Best team = 1912 Sawx (105-47), led by Tris Speaker and Joe Wood (34-5 in 43 starts!).
1920s = Yankees (3 WS, 5 pennants). Honorable mention = Giants (2 WS, 4 pennants). Best team = the 1927 Murderers' Row Yankees (110-44) that had four Hall of Famers in its starting lineup (Combs, Lazzeri, Ruth, Gehrig), two in its rotation (Hoyt, Pennock) and a third who should be in (Shocker).
1930s = Yankees (5 WS). This will become a pattern. Honorable mention = Cardinals (2 WS, 3 pennants). Best team = 1939 Yankees (106-45) who outscored their opponents by 411 runs! Compare that to the 1975 Reds (254 run differential). No contest.
1940s = Yankees (4 WS, 5 pennants). Honorable mention = Cardinals (3 WS, 4 pennants) -- this was the Cards' decade until the '47 and '49 Yanks won. Best team = '42 Cards (106-45).
1950s = Yankees (6 WS, 8 pennants). This is no contest. Honorable mention = Dodgers (2 WS, 5 pennants). Best team = '53 Yankees (99-52) by default because no WS winner won 100 games in the regular season, although a pair of WS losers ('54 Indians, '53 Dodgers) did.
1960s = Dodgers and Cardinals (2 WS, 3 pennants each). Honorable mention = Yankees (2 WS, 5 pennants). The Yanks had the longer list of accomplishment, but lost to both the Dodgers and Cards in the WS. The Dodgers had one of the most dominating WS wins ever in '63 over the Yanks, and took probably the worst beating ever in '66 from the Orioles (shut out three times). Best team = '61 Yanks (109-53).
1970s = A's (3 WS). Honorable mention = Reds (2 WS, 4 pennants, 6 division wins); Yankees (2 WS, 3 pennants); Pirates (2 WS, 6 division wins). This is why championships matter. Fans always talk about the Big Red Machine, but the A's won the most titles. Best team = '75 Reds (108-54) and '70 Orioles (108-54). Unlike the Reds, the Orioles led their league in pitching as well as hitting and the O's had some decent players (Palmer, B. Robinson, F. Robinson). The Big Red Machine is continually overrated because it had a modern AL-quality lineup in the NL, but the pitching was not notable. Think the Reds could beat the '98 Yankees? Think again -- the '75 Reds bonked 5-1 (5-2 after 6 innings) and 6-3 leads against the RedSawx in two different games of the '75 WS; the Mariano-era Yanks don't blow those leads.
1980s = Dodgers (2 WS). This is pure default and fluke. The Dodgers are the only multiple winner of the '80s. And for half the decade, the Dodgers sucked. If the Yanks had used anyone other than George Frazier in key relief situations in the '81 WS, baseball might have had 10 different winners. Honorable mention = Cards (1 WS, 3 pennants); A's, Royals and Phils (1 WS, 2 pennants each). Best team = '84 Tigers (104-58); yes, they were better than the '86 Mess (108-54).
1990s = Yankees (3 WS). This is especially great because in '95 the Braves had their WS rings engraved with "Team of the Decade" on them and the Yanks beat the Braves twice in the Series: once by grit and good fortune ('96), and once by whipping a** ('99). At the time the Braves had their rings engraved, the Blue Jays had won more titles (2-1). There's a deadly sin for that . . . Honorable mention = Toronto (2 WS); Braves (1 WS, 5 pennants). Best team = '98 Yankees (114-48). They're the best team since the end of WWII and it's really not close (Tom Verducci had a great piece on this).
2000s = currently RedSax (2 WS). And that's where the fun is. If either AL team wins the WS, there's a legitimate debate. The Yanks will have 2 WS, 4 pennants and 8 division titles; the Angels would have 2 WS and 6 division titles. The Red Sax have 2 WS and one division title. And although the Redsux would be 3-1 in playoff series against the Angels, they've split two with the Yankees. The Phils would get a close second to Bostin if they go back-to-back because they only made the playoffs three times; the Massholes have won six playoff berths ('03-05, '07-09), although their actual participation in '05 and '09 is subject to speculation as to whether it really counts as participation. Best team = '05 WhiteSax (99-63) -- they had the best playoff run (11-1) and the most impressive pitching performance in a series since the '96 Braves when their starters threw 44.1 of 45 possible innings in a 4-1 ALCS wipeout of the Angels.
Now we know the stakes.
As for predictions: the Yanks SHOULD win, but who knows what will happen. Lackey and Saunders match up well with the Yanks, the Angels 'pen is weaker than it was when the Angels beat the Yanks in '02 and '05 -- the game is longer than six innings now. And for all the chatter about how the Angels own the Yanks in the postseason -- the Angels survived in '05 by about 5-10 feet -- the distance by which Matsui's blast with two runners on in the 9th inning of a 5-3 ALDS game 5 went foul.
The Yanks need to pitch well and not fall into traps: (1) worrying too much about the Angels' running game; (2) going completely by-the-book with 7th, 8th and 9th inning roles for the relievers. Torre would use Mo to START the 8th with a day off to follow and Girardi needs to be ready, willing, and able to make that call.
The Dodgers and Phils will be interesting but I'm thinking the Dodgers win. Bullpens are crucial in the playoffs and the Dodgers' 'pen is far superior to the Phils'. Just ask the '92 and '96 Braves how much a superior bullpen can mean to the team with inferior starting pitching.