I am running SME 7 alpha 8 in Server/Gateway mode over a PPPoE (FiOS!) connection.
DynDNS works fine for me.
I guessed wrong on the host / domain name the first time I set it up (and got a message from DynDNS telling me to knock it off...)
I had to set my entire domain name equal to the registered dyndns host name to get it to work - that is, if my dyndns hostname is "smeserver.dyndns.org", my sme server's domain name is set to "smeserver.dyndns.org"