They happen rather often to me, too. This year: NRT-FRA, FRA-KIX (all booked in V, one segment upgraded to I and FRA-KIX upgraded to C, which meant that an extra ca. 6000 miles ended up in my account on top of 600 EUR due to VDB
).
Last year, upgrades happened to me 6 times on Japan-Germany-Japan routes. None of the intercontinental segments was booked in a class higher than Q. I do confess that I know a guy who works for LH; however, I do not think that he has a big power of forcing agents issue me a BP with a so much sought after "C" on it ( he is just a reservation agent, albeit VERY helpful one).
And as far as the priority of upgrades... The above-mentioned friend once said that FTL, SEN, and HON matter more to LH than any other *G from non Miles and More Program. Clearly, different places have different experiences; however, four times when I was traveling (from NRT and KIX and twice from FRA) with friends who were *G with either NH (Diamond), UA, OZ and Pandion (spelling???) with SK, none of them was upgraded at the gate whereas I, being a FTL, managed to get an op-up (my booking class was lower than theirs, too).