For those of you who would like an additional method of purchasing on your Xbox Live account, Microsoft has apparently heard your calling, and will address your needs when the next XBL update occurs. Currently, the next update is scheduled for the 19th of May.
Currently, XBL subscribers use personal credit cards to buy points, which, in turn allows them to purchase items from the Xbox marketplace. Points can also be acquired through gift cards, but these are the primary methods for acquiring goods on XBL. That, however, is about to change once the latest dashboard update is in place. Thanks to a mailing received by Joystiq.com, courtesy of a member of the Microsoft team, it has been revealed that PayPal will be soon be available as a method of payment for XBL members.