Xbox Live Points are the currency for Xbox live, the online section of the Xbox 360. Recently the marketplace has massively increased with lots of new downloadable content including small games from the Xbox Live Arcade, classic Xbox games, gamer pictures (a waste of money!), add-ons for games like new maps, songs e.t.c and even movies and user created games!
You can buy these points direct from the Xbox however they are normally more expensive, cannot be given as a gift and safer as you don`t need a credit card to buy points this way. Therefore I recommend buying a points card over getting them direct from Microsoft which means if you want any downloads for your Xbox which are not free (which most are not!) you get a points card.
Online you can buy points cards for about £15- £17 which makes 100 points between £0.71 and £0.80 approximately. The problem is that although the content is great the prices are quite expensive for these cards which make everything else expensive.
Most people buy arcade games which cost between about 400 points to 1200 for the best ones and map packs which cost 800 points. Map packs are available now for nearly all popular shooters and games like Halo, Call of Duty and Gears of war all have map packs. However I do wonder whether
I do recommend Xbox Live Points Cards as they allow you to download all sorts of wonderful things from the Marketplace however they do come at a price and I do sometimes wonder whether developers have made these add-ons when games are released and are just waiting to sell them at a high price or rush games!