The answer is no. The index entry led me to the desired census image for William S. Newman and that is what I cite. The citation for William S. Newman's 1860 census entry makes it easy for anyone to find his entry--without the need to utilize the index.
And that's the purpose of the citation. The index is but a means and should only be cited if it provides information not in the census. I could have made a notation about the index entry in my citation and the fact that it was incorrect, but did not really see any reason to do that.
Here's the citation for the 1860 census reference for William S. Newman along with the image.
1860 U. S. census, White County, Indiana, population schedule, Princeton Township,p. 512 (handwritten, upper left), dwelling 345, family 347, William S Newman household; digital image, Ancestry.com (http://www.ancestry.com : accessed 10 September 2011); citing NARA microfilm publication M653, roll 307.
