How does renting DVC points/stays work?

Is this a legitimate thing for someone who is not a DVC member to do? I had an old boss who had occasionally sold or rented out his, but I'm not sure if that was to DVC members.

When I've gone to some sites it looks like you can buy someone's already reserved rooms, but at what seems like a discount? Is this legitimate, if so are their any issues we'd likely encounter? Will there be other people in the room or is it a private stay?