Over the last day or so reports were surfacing on the Internet that Microsoft was going to ban gun props from being available in the Xbox Marketplace for your avatar.  All those stories were referring to a post at the Epic Games Forums which stated:

Heads up! Starting on Jan. 1, 2012, the Lancer and Hammerburst avatar items will no longer be available on Xbox LIVE Marketplace. If you’ve purchased the items prior to Jan. 1, you will be able to keep them. A new policy goes into effect for all gun-like avatar items on the Marketplace…

Unfortunately, there was no official information from Microsoft about this situation but I have been able to now confirm that this is in fact the case. According to a Microsoft spokesperson restrictions will go into place on 01 January 2012:

Xbox LIVE Marketplace has updated its policies to provide further clarity for third-party publishers submitting content for approval. This includes details about weapons such as firearms. Xbox LIVE has always reserved the right to reject or expire from the marketplace any type of weapon prop content that is deemed unsuitable for its general audience. Because the Xbox LIVE Marketplace is accessible to members of all ages, it is important our policies clearly address what content is available to all. This policy provides additional clarity to publishers in advance of the content review process.

As you can see the folks at Xbox have always reserved the right to deem what is appropriate for inclusion in the Marketplace but made some clarifications to the current policies that will implement this restriction as of 01 January 2012.