Is there a rule of thumb regarding a dollar amount that is better to purchase than redeem miles?

Nope. Depends on your situation - how you usually use your miles, do you need to buy enough tickets to qualify for elites, etc.

My general rule of thumb (when I was flying a lot) was 1-no domestic USA tickets and 2-only use money for international if it was really cheap. At that time I was generally earning enough miles for my wife and I to fly economy to Europe three times every two years. Not being even close to well-off, if we wanted to go to Europe we had to use miles and hotel points. Except for the really, really cheap flights paying real money wasn't much of an option.
There are threads here and on flyertalk that discuss actual value of miles, including the value of miles not earned because of using miles. Whew!

check this thread:

http://www.fodors.com/community/air-...iles-worth.cfm

I think purchasing a few miles to qualify for an upgrade or freebie in business/first on an international flight can be worth it. Otherwise, no.

I won't use miles for a ticket that is less than $500 RT and usually closer to $700 RT. The majority of my miles go to upgrad to Business or First Class on long haul International travel. That is when the true value shines.

My threshold to use FF miles for tickets is about 1c/mile, maybe 1.2c. That translates to a $250-300 ticket for 25,000 miles. If the ticket costs less I'll pay cash, if it costs more I'll consider using miles.

I also like the flexibility of FF tickets, especially when I'm trying to plan family trips in the summer. I know where I'll be going, but may not be 100% certain of the dates. With FF tickets you can change dates for free as longs as the itinerary is the same and there are FF seats available.

This is handy when I want to book tickets 4-5mo in advance but don't have 100% clarity of work or family/kid schedules. It that case, I may lower my threshold and use miles for a $200-250 ticket. 250k+ miles on the books don't do me any good if I don't use them, as has often been pointed out.

Right now I'm actually trying to hoard miles to take family of 4 to Europe next year, business class (at least one way).

<i>I also like the flexibility of FF tickets, especially when I'm trying to plan family trips in the summer. I know where I'll be going, but may not be 100% certain of the dates. With FF tickets you can change dates for free as longs as the itinerary is the same and there are FF seats available.</i>

Not so with Delta. $250 change fee for any change. Plus the fee for using a FF ticket for last minute travel (the one thing I used to love with NW) is gone. The fees are so high, that I might as well buy a ticket. Even putting miles back into your account has the $250 fee attached unless one is Platinum Elite -- then you are allowed 3 changes per year without fees.

Please don't lecture me about the virtues of other airline programs. I live in a Delta hub and there just aren't any other choices for accumulating substantial miles.

good point TC - not all programs are equal, including our ability to use them as well.