If using fresh pearl onions, bring a 3-quart pot of water to a boil over high heat. Add the onions and cook for 1 minute to loosen their skins; drain in a colander and rinse under cold running water until cool to the touch. Pinch each onion at its stem end to make it slip out of its skin. If it doesn’t, use a paring knife to remove the skin.
Cook the pancetta in a 12-inch skillet over medium heat, stirring constantly, until crisp, about 5 minutes. Using a slotted spoon, transfer the pancetta to a plate.
Add the Brussels sprouts to the skillet and cook, undisturbed, until lightly browned on one side, about 2 minutes. Flip and cook, undisturbed, until lightly browned on the second side, about 2 minutes more. Add the butter, wine, and onions. Cover and cook, stirring occasionally, until the sprouts and onions are tender when pierced with a fork and most of the liquid has evaporated, about 15 minutes.
Stir in the sherry vinegar and pancetta and season to taste with salt, pepper, and additional vinegar. Transfer to a platter and serve.
You can blanch and skin the onions up to 1 day ahead; refrigerate in an airtight container.