1/2 cup rice vinegar (or substitute white vinegar)
1/2 cup + 2 Tbsp. white sugar
1/4 cup water
3 Tbsp. fish sauce
2 Tbsp. sherry (or cooking sherry)
3 cloves garlic, minced
1/2 to 1 Tbsp. dried crushed chili (1 Tbsp. makes spicy-hot sauce)
1+1/2 Tbsp. cornstarch dissolved in 3-4 Tbsp. cool water
Place all ingredients - except the cornstarch-water mixture - in a sauce pan or pot. Bring to a rolling boil.
Reduce heat to medium and let boil for 10 minutes, or until reduced by half. (Note that the vinegar will be quite pungent as it burns off. Generally, I find rice vinegar less strong than regular white vinegar).
Reduce heat to low and add the cornstarch-water mixture. Stir to incorporate and continue stirring occasionally until the sauce thickens (about 2 minutes).
Remove from heat and taste-test. You should taste "sweet" first, followed by sour, then spicy and salty notes. If the sauce isn't sweet enough, add a little more sugar. If not spicy enough, add more chili.