Welcome to FlyerTalk willnevile!

1) It's pretty terrible value to use points for money off flights. The conversion rate for points to pound are terrible. I would advise not doing this unless you have many hundreds of thousands of miles to burn.
2) It's almost always best value to use points for straight redemption's (usually in Upper Class, but any class is fine). They can be used for hotels and other things, but the value tends to be less. Most people use the rule of 1p per mile. Any more than that, its great value, below it, not so great.
3) Reward flights won't necessarily be released when revenue fares are. Whenever you do see availability, using either the Virgin Atlantic site or a tool like Expert Flyer, snap them up because they go quick; a lot of people check at least once a day, if not more. None may be offered at all on the popular routes (of which MCO does fall into the category of).
4) Upgrading with points requires a seat to be available for mileage redemption, in the same manner as point 3. The ticket will also need to be an upgrade-able fare bucket. See Stuart_f's excellent guide on upgrading with miles here. For cash upgrades, that can be done over the phone if the fare buckets are not totally inflexible, or on the day at the airport subject to availability.

Hope that helps!