To quickly answer your question. . . Yes and No. If you can, elevate the treadmill to a 1-2% grade AND don't even pay attention to the display/distances; in fact, cover them up with something because these paces/distances do not translate to over-ground running. However, the BENEFIT of TM training DOES translate to over-ground running--in a big way. In my opinion, 6:00/mile pace on the treadmill is A LOT harder than running a 6:00 mile outdoors. Psychologically, it's not even worth it to look at the pace because then you are asking yourself, "Well, what does that 5:5X mile mean?" I am a big proponent of just adjusting the pace based on a specific heart rate (if you know what that is). The EFFORT is what is important. Your LT heart rate is pretty steady throughout your competitive years and it is the pace per mile that will decrease with improved fitness over time.
And now, a bit of a rant.
Forget about what all of these people are saying about "being tough" and running outside. Just because something is hard, does not mean it's beneficial. For example, doing 20x400m as hard as I can in the snow is really hard. . . but also really dumb.
I try not to rely on anecdotal evidence, but I personally have had amazing results when training at Lactate Threshold pace on the treadmill. I took a page out of the book of Marius Bakken (a 13:06 guy who lives in Norway). After running EVERY SINGLE workout on the treadmill one winter, I PRed in my first 3K back (8:38)...
Training on the treadmill actually has several advantages:
-->You are building economy of motion because you're not slipping (why training in sand/snow is actually pretty dumb and just hard)
-->If you are training at your LT pace, you can strap on a HRM, or use a blood lactate meter, to lock in at the absolute most specific LT pace (cover up the display and go by the data); my TM doesn't even have a speed display and just a sliding speed adjustment
-->Although you should be sure to take the proper precautions, running on a TM with a very slight incline will more closely mimic what is lost in wind resistance AND improve your form--as you are forced to run with a midfoot/forefoot strike
-->Like a previous commenter had to say, it mimics running on an indoor track (to avoid overheating, just set up a box fan right in front of you and move from the front to the back of the treadmill periodically)
-->Running on the TM allows you to focus on STRIDE RATE. . . BIG TIME! Why? Because you are locked into a specific pace and can just focus on taking MORE STEPS. . . More steps=more economy=improved performance
-->You can set up a full-length mirror right in front of you to focus on form the whole time
Well, I'd love to hear anyone elses thoughts on TM training. . . any other TM-training successes?