I am assuming that SW will combine FF programs with Airtran, but you do have a point that nobody knows for sure. I personally doubt the no frills attitude will include taking away Airtrans business class AND FF program.
Past mergers have combined programs easily, and if SW had kept to the point valuing of miles they would have been easily combined. Usually an airline would give fair value so I would expect a equitable conversion to rapid reward points. They should also be expected to honor an aquired airlines ticket, whether paid or award. At worst I would expect to have to use the ticket, if fees or policy make rescheduling or redepositing costly or impossible.
I would expect after they get the routes and fleet set up they will announce something about the FF program, maybe by the end of the year.
as far as using them for upgrades to business, business is going away well before a year, i would have to book a 2011 flight. luckily I have 30 points to use (2 of which expire in oct.)
I was hoping to get an even 32 and wait for SW to convert them. After reading your post I may hedge my bets and book a RT award for after Feb 2012. It would save/use my expiring points as well.