Well, the T&Cs actually do not say "upgrade and breakfast" -they do say:

Gold VIP Membership
...
* Either upgraded accommodations (subject to availability and does not apply to suites) or an amenity at Hilton Family hotels, as determined by the hotel. The type of upgraded accommodation or amenity varies by hotel. For example, if the hotel does not offer upgraded accommodations or upgraded accommodations are not available, the hotel may offer the Gold Member one of the following amenities during his or her stay: complimentary high-speed internet access; complimentary daily breakfast for two; HHonors bonus points; or complimentary snacks or beverages. Ask your hotel whether it provides Gold Members with an upgraded accommodation (and if available) or an amenity, and if applicable, the type of amenity.

Diamond VIP Membership
...

* Either upgraded accommodations (subject to availability and does not apply to suites) or an amenity at Hilton Family hotels, as determined by the hotel. The type of upgraded accommodation or amenity varies by hotel. For example, if the hotel does not offer upgraded accommodations or upgraded accommodations are not available, the hotel may offer the Diamond Member one of the following amenities during his or her stay: complimentary high-speed internet access; complimentary daily breakfast for two; HHonors bonus points; or complimentary snacks or beverages. Ask your hotel whether it provides Diamond Members with an upgraded accommodation (and if available) or an amenity, and if applicable, the type of amenity.

Of course, the Membership Levels page, which include the new Executive Lounge Access Policy actually, is where the breakfast is mentioned in a more positive light for Golds and Diamonds (links below.)

If Hilton T&Cs don't reflect the breakfast policy and it is hidden away (relatively) in the Status perks, how do you think a relatively disinterested or slacking desk clerk will know this?

"
Gold VIP Membership

At Hilton®, Conrad® Hotels & Resorts and Doubletree®, choose from:

* A space-available room upgrade, including breakfast.**
You will be upgraded to an Executive Floor room (where/when available) at time of check-in. If an Executive Floor room is unavailable, you will be upgraded to the next best available room from the room type booked. Upgrades exclude suites, villas and specialty accommodations. At hotels with Executive Floor lounges, if an Executive Floor room upgrade is available, you will also receive access to the lounge. In addition, you will receive complimentary Continental breakfast for you and up to one additional registered hotel guest each day of your stay.
* Enjoy complimentary high-speed internet access, each day of your stay.
At hotels that already offer a choice of a standard or higher-speed connection, you will receive access to the higher-speed connection at no cost. If a hotel does not offer high-speed internet connectivity, simply choose another option.
* Earn 1,000 Hilton HHonors® bonus points per stay.
A great way to maximize your points earnings.


Diamond VIP Membership

At Hilton®, Conrad® Hotels & Resorts and Doubletree®, choose from:

* A space-available room upgrade, including breakfast.**
You will be upgraded to an Executive Floor room (where/when available) at time of check-in. If an Executive Floor room is unavailable, you will be upgraded to the next best available room from the room type booked. Upgrades exclude suites, villas and specialty accommodations. At hotels with Executive Floor lounges, if an Executive Floor room upgrade is available, you will also receive access to the lounge. In addition, you will receive complimentary Continental breakfast for you and up to one additional registered hotel guest each day of your stay.
* Enjoy complimentary high-speed internet access, each day of your stay.
At hotels that already offer a choice of a standard or higher-speed connection, you will receive access to the higher-speed connection at no cost. If a hotel does not offer high-speed internet connectivity, simply choose another option.
* Earn 1,000 Hilton HHonors® bonus points per stay.
A great way to maximize your points earnings.


** Executive Lounge Access Policy (for all)

If you select a space-available room upgrade as your on-property VIP benefit, the following policy will apply effective August 15, 2008, at all Hilton®, Conrad® Hotels & Resorts and Doubletree® hotels:

If you are a Gold VIP, you'll be given access to the Executive Floor lounge when you receive a room upgrade to the Executive Floor. If an Executive Floor room upgrade is unavailable, you'll still receive daily complimentary Continental breakfast in lieu of lounge access.

If you are a Diamond VIP, you'll enjoy access to the Executive Floor lounge, even if you don't receive a room upgrade to the Executive Floor, including daily complimentary Continental breakfast.

At hotels without Executive Floor lounges, Gold and Diamond VIPs will receive complimentary Continental breakfast for themselves and up to one additional registered hotel guest each day. If breakfast is included in the room rate, you'll receive an alternate welcome amenity that varies by hotel."

If Hilton HHonors is confusing about the perks, imagine if you were a new, or disinterest clerk... Know where to refer desk clerks to for the proper information, or the management staff of course, or take a printed / printable version you can show them. And we can only hope HH will add the new language to the T&Cs, but don't hold your breath waiting.