Steem has now fell below $1 (howevering at $.99), what does this mean taking into account that sbd is now worth more?

Steem has been below $1 for long periods (relatively speaking) in the past. The Steem economy can work with Steem below $1 and also with Steem below the "pegged" $1 value of SBD.

A lower value of Steem means lower post payouts so everyone's rewards will fall.

However you will get more Steem for your post payouts (if Steem is at $0.5 you would get 20 Steem for a powered up 10STU author payout).

The two above effects broadly offset each other if you look at it from a "Steem-economy" perspective, since the generation of new Steem (the Steem inflation) is constant.

Less people post when the Steem price is lower and rewards are lower, so it can be a good time to post and accrue more Steem. This can be a good plan if you think the price of Steem is going to rebound.

The current fall of Steem has also increased the proportion of SBD to above the 5% Steem supply threshold. This means that reward payments can no longer be made in SBD. Liquid Steem will replace SBD in post payouts.

It may be a good time to exchange SBD for Steem, however this is very hard to judge. Steem may fall further. SBD may pump due to the lack of new supply. Or Steem may rebound back above the SBD level.

As always, do your own research, read as much around the subject as you can to understand the details of how it works. There are lots of complexities!