does the menacer work with sms games

You mean the Regular SMS Light Phaser? Yes.
Yes, Its the exact same plug.

The Genesis/Mega Drive can use any SMS accessory when the Power Base Converter is plugged in, SMS peripherals work just like they would if you were using them on a standard SMS.

The Phaser, sports pad, contol pads, and the 3D glasses all work without problems.
For the most part, yes.

But some games don't work too well with the MD pads.

If I had my PBC manual with me right now I'd list them for you....