Personally, I only ever use my points for full Upper redemptions. Given the awful surcharges VS (and BA) impose on reward tickets, I believe this gives best value.
There are those who advocate buying an upgradable Y ticket and using miles to upgrade, but when I have done the maths I have found that more expensive. YMMV
Details of upgradable tickets are here -
http://www.virgin-atlantic.com/gb/en...d-flights.html
Nick