Roasting brings out the sweetness of beets and the subtle flavor of shallots.
Heat oven to 400 degrees. Place beets and shallots in a large bowl. Drizzle with 1 tablespoon olive oil, and season with 1 teaspoon salt and 1/4 teaspoon pepper. Toss well, and transfer vegetables to a large roasting pan.
Cover pan with foil, and place in oven. Bake until beets are tender when pierced with a knife, 50 to 60 minutes.
Remove from oven, and let stand until cool enough to handle. Peel beets and shallots, and cut beets into 1-inch pieces. Combine in a serving bowl. Add sherry vinegar, remaining 1 tablespoon olive oil, 1/2 teaspoon salt, and 1/8 teaspoon pepper, and toss well to combine. Serve immediately, or set aside until ready to serve.
Look for bunched beets rather than loose ones; they're usually fresher.