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I've seen it linked and seen plenty of people with the armor. It only drops in veteran content though, just to clear up any confusion.
But you can make low-level gear with it right?
Qaevir Av Morilye | AD/EP Magic Sorcerer
Qaevir's Champion | AD Magic Dragonknight (Emperor of Thornblade)
Qaevir Av Molag | EP Magic Dragonknight
Qaevir's Unbound Minion | DC Magic Dragonknight
Qaevir Av Moriłye | AD Magic Templar
Yes, but it looks bad, every 'level' of armor has its own look and low level Daedric style looks boring. (Need to be blue or better, or L40 or better before it looks cool)