It can get a bit confusing can't it?
Ok, let's do an example using some of your info:
Say you want to book a vacation costing 500 points in December 2008 and your use year is August.
You have:
100 points left from 2007 (that run out in July 31 2008)
250 points from 2008 (August 1 2008 - July 31 2009)
250 points from 2009 (August 1 2009 - July 31 2010)
Now as your use year is August, the December trip will be out of your 2008 allocation. (well, in December, that's a given) and you have 250 to spend in 2008.
So firstly you bank your 2007 points, this leaves you with 350 in your 2008 allocation (these can't be transfered back, but they'll be used first so no biggie).
Then you borrow 150 points from your 2009 allocation, this gives you your 500 points (These can't be transfered back and will be used last so only transfer what you need).
The points are used in order so first the 100 banked, then the current year, and then the borrowed.
This means that if you borrowed 200 points fron your 2009 allocation, you'd have 50 points left in your 2008 allocation that could not be banked or otherwise transfered back to you 2009 allocation.
Whenever you are booking, the points come out of the relevant use year for the date of arrival, not the date of booking which is why you need to bank the 100 spare points from 2007 as they are not part of the use year you want the room for, even though they are still live at the time of booking.
As far as I'm aware this is how it works, though I'm fairly new to DVC myself so someone else could have better info than I.
Only other thing to remember is to make sure you bank your points in time, if you leave it too late they may not let you transfer them. I think it's a blanket 4 months before the end of your use year now (that rule of 4 thing they put in the latest magazine) but don't quote me on that.
Hope that doesn't make it more confusing!