I believe that Paolo answered the second part of this question. No HD in velocity.
However, I was wondering about the first part of this question. Can we edit progressive scan video in SD with the ivs powerpack and velocity on the velocity timeline? Thanks in advance for your help.
to edit SD progressive there is no problem , many our customers done it with excellent results before ivsPowerPack availability. You could get some iussues only with slomo and fast motion when some fields are mixed but this problem have been addressed with velocityQ version 9.1 enabling in Clip Speed panel: No Interfield motion.
Some years ago, an our Italian customer created and edited with own 7 or 8 Velocity systems(SD) an high end stop motion movie.