You can definitely do SM S&V in Dread Guard gear, especially augmented and min-maxed. It will not be a roflstomp though. The best analogy would be doing SM EV in level 45 gear. It works, and once you're all familiar with the mechanics you can get through pretty easily, but it's not a gear smash by any means.
HM S&V definitely has tighter requirements, especially on the later bosses. You should try to get at least a few pieces of Arkanian for everyone before you go into HM. That should allow you to progress at least up to the puzzle, using the drops you get along the way to accelerate your progression. The final boss is very, very tight in hard mode. People on the PTS were clearing it in full Arkanian, but not pleasantly. Unless you're a god among raiders, you're probably going to need to have replaced all of your group's Dread Guard pieces by the time you get to that point.
What gear is there between Dread Guard and Arkanian? Didn't think it was as bad as SM EV in level 45 gear o.o