Yes. Take a look at the Starwood forum under FT Miles, for example: a lot of recent discussion about the award cancellation policy, in which the topic of reimbursement comes up.

Also, sometimes the rate paid by the frequent guest program to the hotel for an award stay is shown as the "rate" on the hotel folio. Example: A rate of $60.55 was shown on my free Friday and Saturday award at the W Seattle (a hotel that normally charges rates in the vicinity of $200 or higher). This seems to indicate that the reimbursement is at "wholesale" rates rather than "retail."

Kathy