Payoff pitching was a little mini game within the game in which you could boost the rating of your pitches. Certain pitches, that were deemed more important, were "payoff pitches" (Strike out situations, pitching out of jams, etc.). By hitting the catchers spot with the chosen pitch in these situations, you received a boost in that pitches rating.
2K8 also involved a three step pitching process. In doing this you were able to control the power/effort, the quality and the location of the pitch by performing all three parts.
The difference to the current system is that you had to time the release of the stick after the movement with an on-screen graphic.
So for a fastball, it would be 1) Pull Back to desired effort then 2) Press forward and hold as the meter shrunk towards the center and then 3) let go as it was as close to center as possible.
It was a thing of beauty that only needed to be fine tuned, but instead, they scrapped it.