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I just went through this myself. Manual page breaks are the way to go for Meatgrinder. I think the Style Guide may be referring to an earlier version of the ePub format when it says that page breaks will not be honored.
When I formatted mine exactly how the Style Guide said, it looked awful in all formats. When I went back and added in my manual page breaks, everything suddenly snapped into place and looked great.
I read the other day that Smashwords just put out a new style guide... maybe some of these things are updated in the new one?
Anyway... definitely, definitely definitely use the hard page breaks, and avoid the Heading styles if you can. It's just easier that way, and looks great!
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