Since we lived in Catalonia for eight years and we still have many friends there, I feel that I am at least somewhat qualified to have an opinion. If I still lived in Catalonia, I would vote no in the referendum, but I would definitely go and vote, since I believe that in a democracy, people should be allowed to express an opinion without fear for arrest. If a significant majority wants to be independent, so be it.
It's been very sad watching the escalation between Catalan separatists and the central government. If Rajoy had been trying to create the conditions that make an independent Catalonia inevitable, he couldn't have done a better job. Catalans are very proud of their nation, even if they aren't necessarily all separatists.
Sending the Guardia Civil (which played a significant role as Franco's enforcers during the dictatorship) means alienating the people who would have actually supported a unified country. In addition, trying to solve this with heavily armed police means that at some point someone will probably get killed, and then there will be reprisals, etc.
I'm actually reading a book on successful and unsuccessful negotiations, and unfortunately the PP and the current Catalan government perfect fit the role of the worst possible negotiators.
I don't see what endgame Rajoy could possibly be hoping for... even if he stops the referendum, sends thousands of people to jail, and rips up the devolved government in Catalonia, what then?