Essentially, points act as a form of in-network "currency." Points are used in vacation clubs and exchange companies and offer the owner a variety of resorts from which to choose. Points are just another way that timeshares are becoming increasingly flexible.
With exchange companies like RCI or Interval International, owners can trade their week for a certain number of points depending on resort, season and number of days traded. They can then use the points they receive to "purchase" time at other in-network resorts, or they may bank their points in order to "save up" for a vacation that their home resort might not otherwise have exchanged for.
With Vacation Clubs, owners are afforded a certain number of points every year. They may then use these points to travel to one of dozens, sometimes hundreds, of resorts within a particular Vacation Club network. Sometimes points are backed by an actual deed at a specific resort, and sometimes they are not.