Remember that currently upgrades on international flights come from U/Z inventory ONLY. If there is no U/Z available, there is no upgrade, even if there are emply seats in F, A, J, D. The "stand-by" ID fares can be confirmed at the gate for any emply seat on the aircraft in the cabin paid or entitled. Hence they often get the seats while FF's have been refused upgardes. I am not debating whether this is good or bad policy, but it is the current process.
This MAY change come May 2005, when international upgrades will only be confirmed at check-in the day of departure. It has not been clearly spelled out, but I am assuming this will work similar to the current domestic ODU process, where upgrades do not have to come from U/Z availability, but will be allocated from unsold seats. This may mean better upgrade availability (we will have to wait and see, least for WP status members) and less "stand-by" seats available for IDxx fares in the premium cabins. They may end up with the Y/J seats that WP members have upgraded from?