Will continue to be the standard
Sources confirm that Microsoft will not be making regular currency the standard on the Xbox 360 despite the fact that Microsoft will use regular currency for transactions in the Windows 8 store. Microsoft Points are apparently only going to be phased out on Windows 8 machines, and Microsoft Points will still be the standard on the Xbox 360.
If users wish to make a purchase for Xbox Video or Xbox Music and wish to use regular currency, they will have to do so using their Windows 8 computer, since if they purchase it on their Xbox 360 it will be done using Microsoft Points going forward. Microsoft will allow current Xbox Live customers to make purchases on a Windows 8 computer using Microsoft Points, so if you want to use your Microsoft Points you can still do so there.
Microsoft has not explained why they have made the decision to split their funds systems for Windows 8 and the Xbox 360. It also has not said if the Xbox Next/720 will continue to use Microsoft Points; we suspect that it is likely that will be the case going forward, but this has yet to be confirmed.