My query:

DROP TABLE IF EXISTS tmp;
CREATE TEMP TABLE tmp AS SELECT *, ST_BUFFER(the_geom::GEOGRAPHY, 3000)::GEOMETRY AS buffer FROM af_modis_master LIMIT 20000;
CREATE INDEX idx_tmp_the_geom ON tmp USING gist(buffer); 
EXPLAIN SELECT (DUMP(ST_UNION(buffer))).path[1], (DUMP(ST_UNION(buffer))).geom FROM tmp;

Output from EXPLAIN:

Aggregate  (cost=1705.52..1705.54 rows=1 width=32)
  ->  Seq Scan on tmp  (cost=0.00..1625.01 rows=16101 width=32)

Seq Scan means it is not using the index, right? Why not?

UPDATE: Even adding a where clause that filters based on the buffer causes a Seq Scan:

ANALYZE tmp;
EXPLAIN SELECT (DUMP(ST_UNION(buffer))).path[1], (DUMP(ST_UNION(buffer))).geom FROM tmp WHERE ST_XMIN(buffer) = 0.0;

(This question was also posted here. Apologies for cross-posting but the community there is a bit more active (maybe just on PostGIS query topics?), so perhaps wil provide an answer quicker.)