I don't know what the specifics are right now but we did an add on in August & took the (double) developer points instead of the $ off.
What happens is you get an extra lump of points (equal to the number you purchsed) that you can use over the next 12 months. There was some discussion on the boards about the time frame... seems some people who purchased earlier were only given 7 months to use so I would verify the current details.
There are limitations on these such as no banking beyond the 12 months, since they have no UY they also have no home resort priority & I don't think they can be transferred or used for exchanges but again, I would verify the details with your guide.
Developer points will not show up on-line. You need to be specific when talking to MS about making a res using the developer points as these transactions are done manually. MS won't know to use them (like they do with banked points) because they can't see them. They have to go looking for them, so to speak.
We have had no problems using ours whatsoever but I think some people have had a bit of confusion.