My husband and I had a similar experience on a Continental flight domestically. Boarding in coach in LAS, we had A and C seats, hoping for a free B seat between us. Unfortunately,America West had equipment problems and their passengers were reaccomodated on our flight to IAH. We boarded a little late and found a very large woman with the famous seatbelt extender in the B seat, grinning like a fool. She was spilling into both seats, with both armrests up. There was NO WAY we were going to fit into our seats.

God bless my darling husband, he marched right to front of the plane and demanded that CO rectify the situation. They told us to "deal with it" and "be more understanding," but he would not budge. The FAs were adamant that we sit in our assigned seats. My husband refused to move unless something was done. He started on about "what happens if there's an emergency?" Finally they brought a red coat on board who muttered "oh my god" and quickly escorted us off that flight. After profuse apologies and many explanations from the red coat, we flew FC back to IAH on the redeye.

If it ever happens again, DO NOT LET THE PLANE TAKE OFF WITH THE SITUATION UNRESOLVED. I would have been at the front of the cabin demanding to be reaccomodated (or standing next to my husband while he demanded a resolution, he's British and very good at complaining politely but firmly). Once you're airborne, you're stuck.