Ok I called Microsoft Customer Service and they wouldn't let me use 100 trade in credit, I told them I was really upset since I just trade in my mint condition 360 for $50. They transferred my call to different customer service department, I explained the situation again and the guy chatted...
The trade in offer does NOT stack with the $50 off promotion. I feel completed scammed. As I just trade in my 360 for $50 instead of $100. F#ck Microsoft!!! I was on the phone with sales and they wouldn't help either.
You are right mostly on item with Buy-it-now, or something that demand is very low; and assuming every seller has similar feedback reputation. But NOT eveything else.