If I have a UY of December, can I use my BANKED points from 2008, use my points from 2009, and BORROW points from 2010 to plan a trip in December 2009 (Dec 24 - Jan 2)?
Yes you can. With a Dec UY, you will need to bank your 2008 points by the end of July, 2009, but you'll probably want to do the banking before you make your December, 2009 reservation.
MS will borrow enough points from 2010, as needed, for your reservation.