Muttiah Muralitharan starred with the ball as the off spinner registered record breaking figures of 7-30.
Batting first, Sri Lanka scored 294/5 with Jayawardene and Atapattu scoring fine tons.
Ajit Agarkar ended with figures of 3/48 after 10 overs.
India had started off well, with Sachin Tendulkar providing India with a fine start as they were placed at 99/2 before Murali came into the attack.
Murali dismissed Tendulkar and ripped through the heart of Indian batting, also accounting for Robin Singh, Vinod Kambli, Yuvraj Singh, Hemang Badani, Vijay Dahiya and Sunil Joshi.
India were dismissed for 226 and went onto lose by 68 runs.
This was a dress reharsal for the final, but it didn't help India much as they lost the final by 245 runs.
In the final, Muralitharan ended with figures of 3/6.