Shedinja only has one HP its whole life, so don't bother with Toxic. The battle style of Shedinja is straightforward sweeping; trying to KO the enemy before they have a chance to fight back, like a real ninja!
My recommended moveset is:
(High Critical Hit-Ratio and gives reliable STAB)
(Gives you a chance to dodge an opponent's attack. Normally Dig is bad, due to the vulnerablility toward Earthquake, but Shedinja negates such an attack with Wonder Guard. Use Dig to pick off Fire-Types that try to burn you with their flames)
Aerial Ace/Metal Claw
(Aerial Ace can give some easy coverage against Grass, Bug, and Fighting-types. The full accuracy is nice! Metal Claw can hit Rock-Types, along with the bulky Ice-types who likely carry Stone Edge. It also gives a passive Attack boost, which is useful)
Keep in mind that it is mandatory for your Shedinja to be holding a Focus Sash. This will let Shedinja take a hit without fainting, and you can either retaliate and KO the opponent, or switch out to save your Guardian Angel.
Shedinja basically invented the term, "Glass Cannon," so be very careful with this Pokemon. It takes a highly skilled player to use a Shedinja well (Of course, I'm not bragging, seeing as my prediction during a battle is terrible), so be cautious of Shedinja, or else you'll see it fainting very often.
EDIT: I saw Pokemonblack's post, and completely forgot about confuse Ray, haha. It's a good alternative for stalling out even longer. It's probably a better choice than Aerial Ace or Metal Claw. Also, you can replace Shadow Claw for Shadow Sneak, if you want. It's not recommended, but it makes Shedinja a great Revenge Killer. Replacing Dig with Sucker Punch will add priority to this slow Base 40 Speed Pokemon as well.