Engadget put up a post about this. Full retail games available for download over Live, using a credit card instead of - or maybe in addition to - MS points. 30 games to start with, new games released weekly. That's all the info that they have. I suspect they'll add more as it's uncovered.
According to Kotaku, the dashboard mockup of the service included Civilization IV, Assassin's Creed, and Mass Effect. There's no info on pricing or how quickly games will be offered via download from when they're available in retail.
Personal suspicion time: Probably year-old (or older) games available for the current retail price. They'll put them on sale every now and again, but you'll probably be able to get it cheaper somewhere else.
Cynical personal suspicion time: If you can't use MS Points at all, it's because those cards go on sale from time-to-time, so someone - MS, the publisher, or both - would lose money.
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