Yes you should still get the miles (based on distance flown) towards your Million Miler total. I flew a straight-up award ticket recently and my Million Miler balance went up by the distance of the flight after the activity posted to my Skymiles account.

ETA: If you're considering using a significant number of miles via Pay With Miles, consider looking at straight up mileage award tickets to see if you get a better value per mile out of the redemption as you'll still get the miles towards your MMer balance (and get the MQDs for the ticket). Pay With Miles yields only 1 cent per mile while I've been able to get 1.7 to 1.8 cent per mile redemptions with award tickets.