You haven't said where your flight is to and from.
The answer is that any time you upgrade with points on VS, you have to either be in a bucket that permits mileage upgrades, or pay cash to get into one.
stuart_f's guide in the stickies at the top of the forum (which wasn't there when you posted your question) explains the process.
http://www.flyertalk.com/forum/virgi...ub-points.html
There have been a number of posts over the years about how the rules for upgrading are waived that the airport, generally when the flight is overbooked; and VS need to need passengers forward, but I have never experienced this personally.
Nick