Pacquaio wouldn't have had any trouble with this guy. Power-punchers and brawlers generally have never bothered the Pac-Man. Slick counter-punchers give him many problems (eg the Marquez fights), Valero doesn't fall in that category.
I'd say Pacquaio busts this guy up and the ref probably steps in and stops it around the fourth or fifth round. Valero had heart and a decent chin so he would go a few rounds.