No, the short sale process will not automatically stop the sheriff sale, althought the lender MAY delay the sheriff sale based on the circumstances of the situation. Sometimes the lenders Left Hand doesn't know what the Right Hand is doing and it may go to sheriff sale anyway.
If your short sale is rejected by the lender, they would continue to proceed with the sheriff sale, whether it be the originally scheduled date or another date, it would be up to the lender and thier attorneys to continue with the foreclosure process.
Hope that helps
Broker Owner, REMAX Home Team
serving Gloucester Twp and Southern NJ