I'm going to chime in on this at this late date just to muddy the waters a bit
This is actually from the AACW forum section, but still applies to CW2:
Force Compositions? Post #9
The question comes down to, for whom does the initiative bonus work if the Sharpshooter regiment is in a division? IIRC the Battle Engine picks opposing brigades to face off at each other in battle. This is regardless of whether the brigades are in divisions or not, but IIRC there is some advantage to having brigades in a division beyond the Command Point cost in that they will be more likely to come to each other's support in battle (this is the nitty-gritty of the Battle Engine and I don't remember too many details).
The best brigades (experience, cohesion, strength (offensive/defensive depending on Posture), etc is evaluated) will be the first picked to fill the Frontage first and fight in a battle. Other brigades are in reserve and can fill gaps in the frontage if they appear because of elements breaking and retreating or being routed.
But when looking at a single SS "unit" inside a division, how will this work, if brigades are facing off at each other? My understanding is that the +1 Initiative bonus applies to all elements fighting which belong to that division. So if Hancock's Brigades is in Hancock's division along with the 12th Pennsylvania Sharpshooters and Hancock's Brigade is selected to oppose, let's say The Stonewall Brigade in Ewell's division, all of the element's in Hancock's Brigade will enjoy the +1 Initiative Bonus when both opposing brigades start firing at each other. The +1 Initiative Bonus will give all the elements a slight advantage of being able to fire first and cause hits before the opposing force can fire. Of course this is assuming that Ewell's division doesn't have a Sharpshooter in it. If it too has a Sharpshooter element, then the bonuses cancel each other out.
Also, for those who like to get into the nitty-gritty you might like to read this too:
Lt. Infantry with experience = Sharpshooters?
My opinion on Sharpshooters? No division without one; don't leave home without it
