American Express Membership Rewards - Basic question: paying with points

If you book travel on the Am Ex web site and use the "pay with points" option, do you still earn ff points on the airline you're flying?

Yes, because you are buying an ordinary revenue ticket, it is not an "award". The full cost of the ticket will appear as a charge on your American Express card account. At the end of the payment process you can choose to redeem points to offset the cost in part, or in full. A credit equal to the number of points (1 point = 1 cent) will appear on your card account.