Why ask in the first place? I just did a hard reset. I took my SD card out first, no reason to play around and lose 13,000 photos even if I have did save them to my computer already. It takes time to recover, why risk wasting the time. I left the SIM card because it is a new one and nothing could be lost anyway.
I have a similar question. I have apps that I moved to the SD card (because I didn't have enough space in the built-in memory). Do I leave the card in during the reset? (I have backed up all the data that's stored on the card: music, photos, etc.). Either way, how does Google know where to reinstall apps that have resided in the sd card?