For those interested I posted this in another forum:
The ambiguity is over. I have about 100k Travelocity points in my account and linked to Travelocity. I can book anything on Travelocity and take it right up to the confirm page. It asks me how many points I want to use. You can mix cash and points at your leisure.
So for example if I book a flight to Hawaii at $820 I have the ability to use 40,000 points and pay the $20 in cash. It works. I could also use only 20k points for a $400 credit and pay the rest. Very flexible.