To be able to upgrade with miles you need to be in the right fare bucket. That is why they have quoted you £750 each - to get you into an upgradeable bucket.
Are you currently in Economy or Premium economy?
If economy you would need 100,000 miles to upgrade both of you on both legs.
If Premium you would need 50,000 as per this table
http://www.virgin-atlantic.com/en/gb...table_2012.jsp
So you don't have enough miles to upgrade both of you for both legs with 42,000 miles but you could do a one-way upgrade for 12,500 miles each. (25,000 in total). You could buy the 8,000 miles you need but that will be approx £120. I am also assuming that all your miles are on one account.
You would also have to pay any additional fuel surcharge (and possibly taxes too)
The problem with many of the flights to the carribean is that there are only 14 seats in Upper Class and they are very popular.
Of course you can wait until you get to the airport but VS don't tend to do special deals - the price is what the price is - and there may not be any seats available at that point.
I have just done a dummy booking and it looks like there are no reward seats available on your dates. It is possible that may change though.
My advice is to call them asl them if there are any reward seats in UC then upgrade. Don't ask to change your fare bucket until they have checled as if there are no UC reward seats then there is no point.