I see SW is offering rapid reward points for 25% off. I'm trying to decide if this is a good deal. Would this be like getting 25% off a flight if I buy the points and then book my flight? Or do the points end up costing more than if I just paid cash for the ticket?
The points will cost you more than the cash price of the ticket, even with the 25% discount.
Example: Looking at a flight from Manchester, NH to Orlando in October, the cash price of the flight is $145, the points price is 8009. Based on the cost info in the article you linked, the full price to purchase one point is 2.75 cents, the price with the 25% discount is 2.0625 cents. So the cost to purchase 8009 points at 25% off is $165.19 just over $20 more than paying cash for a ticket on that particular flight.
To be completely accurate, we should subtract the security fee from the cash ticket price. It is $2.50 per hop and you will be charged that fee on your points ticket as well as the cash ticket. So in the example above, we would compare $165.19 for the cost of 8009 points against $140 (since it was a connecting flight with one stop) so the cost difference is $25, not $20.
To see if the math works for the flights you are considering, just look up the price in dollars and in points. Multiply the number of points by 0.020625 and see how it compares to the cash price of the ticket. Subtract $2.50 from the ticket price for a non-stop, $5.00 if it is a connecting flight with one stop before comparing the amounts.
You have to purchase points in blocks of 500 so in this example you cannot purchase exactly 8009 points, you would have to purchase 8500 points if you had no other points available in your account.