I use discount codes whenever possible as well. I recently went down to St. Kitts and found a great discount code (and even used the $100 Marriott Stay Stimulus coupon) and ended with an average $67/night rate that included full breakfast. Oh, and I was upgraded to a very nice Oceanview balcony room. ^

I've had some pretty good upgrades on very well discounted rates and had some with not so good rates. (And also I didn't get upgrades on discounted rates and not so good rates as well.) So as far as I can tell, my rate doesn't affect my upgrade chances.

I would say the things that will have an affect will be length of your stay, how full the hotel is, your elite status, how many other elites might also be staying there, are you a regular at the hotel, how many "upgraded" rooms does the hotel have, etc.

If you are staying somewhere for a special event, you increase your upgrade chances by contact the hotel management to let them know. I've even received a few suite upgrades doing this for some anniversary trips. Of course even this is affected by the issues I mentioned above.