While J.Edwards detailed instructions are likely invaluable in executing on this option (I would call it Plan C or D, not B...), I thought it would be worthwhile to post the plain English version of this published benefit. I believe it's only valid for OnePass elites.

http://www.continental.com/web/en-US.../services.aspx
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Standby for International Rewards: Elite members who have redeemed an international reward in Continental Airlines premium cabins (First Class, Business Class or BusinessFirst) or in Copa Airlines Clase Ejecutiva cabin, but can confirm reservations only in Economy, may standby at the airport within two hours of departure. Elite members should simply notify the airport agent upon check-in. For unused First Class, Business Class or BusinessFirst rewards, the mileage difference between Economy and First Class, Business Class or BusinessFirst may be redeposited free of charge.

Mileage upgrade rewards are not valid for standby travel.
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Based on the OP, I'm sure they probably should have omitted the word "simply" in the benefit explanation.