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The program is designed to give back to the Xbox community for buying their products. As I have learned you don't need to buy any products to earn the M$₧. You also do not need to be a Gold Member to earn these points.

Rewards Website features

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List of ongoing offers to earn M$₧

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  1. Renew Gold Membership (1 Month) and earn 10 points.
  2. Renew Gold Membership (3 Months) and earn 30 points.
  3. Make your first purchase or renewal and earn 100 points.
  4. Renew Gold Membership (1 Year) and earn 200 points
  5. Renew or Upgrade Gold Family Pack and earn 400 points.
  

List of current month offers

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Past prizes given away.

• In total, 110 VIPs were rewarded with a pass to E3 Expo 2011! 2 grand Prize winners won a trip to E3 worth over $4,000, including airfare, hotel, transportation, and VIP access to the event. The grand prize winners also received a KODAK PLAYTOUCH Video Camera to capture and share all the exciting details from the trip!
  
• Our top VIPs were placed on the ballot for a chance to win one of four Entertainment prizes, including a Zune HD Device, 12-month Zune Pass, Windows Phone 7 LG Quantum, and Kinect Sensor for Xbox 360. Plus, everyone received 100 Microsoft Points for a discount toward a movie of their choice!
  
• While the clock ticked, select Xbox LIVE Rewards Gold members received word that they had been chosen to receive the hottest and highest ranked Kinect games, including Kinect Sports, Your Shape: Fitness Evolved, and EA SPORTS Active™ 2. The response was so overwhelming that all games were spoken for within 4 hours! Only the quickest to respond sealed the deal on this 2011 New Year's exclusive. Top VIPs were awarded 4,000 Microsoft Points as a thank you gift, and adidas Superstar tracksuit Avatar outfits were given to loyal Gold members. Be sure to check your email often and move quickly when you get Xbox LIVE Rewards special offers.
  
• Xbox LIVE Rewards members stepped up to the plate April 1 - May 15, 2011 in an attempt to conquer Gamer IQ Trivia. They answered daily questions about Xbox LIVE multi-player games and a Grand Prize winner took home 10,000 Microsoft Points. Weekly winners received 4,000 Microsoft Points and hundreds of members instantly won 1,000, 800, 400 and 100 Microsoft Points.
  
• Xbox LIVE Rewards members who participated in the Give a Gift and Win Sweepstakes in December 2010 either won a great instant gift, or got to send a virtual re-gift on Facebook if they got something they didn't like, like a fruitcake or an ugly Christmas sweater! 1 Grand Prize Winenr happily claimed stake to the grand prize, a home entertainment upgrade worth over $3,000 (50" HDTV, Bose Home Theater, Xbox 360 with Kinect, Windows Phone 7 & 3-Years of Xbox Live), while hundreds of others took home instant prizes like Microsoft Points and 1-year Xbox LIVE Gold memberships.
  
• Countless avatar awards, MSP, subscriptions & others.
  

It's a pretty good program to be apart of.

They offer plenty of exclusive events, to earn cool swag for your Avatar, as well as chances to get free MSP.