This is the one question I'm typically asked the most - is it better to pay for a flight outright or use miles? And depending on who you ask, you may get a few different answers. It's something that's even widely debated in the blogosphere and seems to always invite varying opinions.
First, each situation is different, and you should always make the decision that's the best for you. There isn't one single way of going about it and it varies per person.
That being said, my general rule of thumb for domestic tickets has been: if it's under $450, then I pay for the flight and earn the miles. This has been my value threshold, since I fly enough to maintain my status on United.
One additional question to ask yourself is how much you value the miles and elite qualifying you may receive. If you value miles around 0.015 per, then a 25000 mile saver ticket would value around $375. A 50000 mile standard redemption in the US would value at $750. Those 50k redemptions are very near the amount needed in coach round trip to Europe, so I tend to stay away from those unless there's an important reason for me to burn the miles. And...they are also near saver award levels in business class depending on availability. If you can go, why not go in style?
I've adjusted my mileage accrual frame of mind over the last months to strive for the ability to travel in business class using miles if at all possible (ideally overseas). This means much more planning ahead of time, but I feel that I can be pretty successful if I stick to how I use and accrue. It also means that for my research trip to Qatar I decided to pay outright for the ticket so that I can get all of those lovely miles in the bank.