Not sure about your first question, but depending on the person sleep deprivation can repress REM sleep, which is the most productive form of sleep for dreaming. Though, it doesn't seem to affect me very much. Sleep deprivation can also cause an REM rebound, which is an extension of REM sleep, for the next night. So, I guess it can be both helpful and harmful. It depends on the person, whether it greatly affects you, or not at all.