This is a great move by Microsoft. It is frustrating as a gamer who takes my score seriously and all achievements were earned the old fashioned way. It is great to see that Microsoft cares about maintaining honesty within the community.
Microsoft is going to reset the offenders Gamerscore to zero and labeling the account as a cheater for the community to see. Moving forward these users can gain new achievements the old fashioned way but cannot regain their old achievements.
It is great to see that Microsoft takes this issue seriously.