Can you use gift cards when buying a console through the pilot program?

They're referring to the Microsoft Rewards program. http://rewards.microsoft.com (There's also an app on the console and you can earn points through the Game Pass app on mobile). Points earned from the program can be redeemed for Xbox gift cards/subscription cards. Once you redeem a gift card, you can use the funds to buy any game in the marketplace.

The thread was locked because it was old and shouldn't have been bumped.

They pretty much do. You can earn points through the Microsoft Rewards program and use the points to redeem gift cards to buy stuff.

For help with the Microsoft Rewards program, you would need to contact their customer support via their redemption page. Rewards points can only be used to redeem gift cards through the Rewards program, not to be used to make purchases on Live. You would
need to save up enough to redeem an Xbox gift card and then use the money from that gift card.

Yes, you may use an Xbox gift card that you can buy through a third-party retailer such as Gamestop in the US and GAME in the UK, that you can then redeem into your account and spend through your console.

You can earn free gift cards through the Microsoft Rewards program.