While I think you can launder the miles through Diners Club or some such I would avoid it as there are really punitive exchange rates.

Bottom line is you cannot upgrade a BA flight (ie flown on BA Metal) with AA Miles.

However, it is not clear from you OP whether you have already purchased the ticket LON-FCO as part of your original ticket. If not, you can simply opt for an AA award on BA in J using your AA Miles for that return sector.

Frankly, I agree with the earlier post that its not that great in Business within Europe if large seats are your key issue; compared to US "Domestic First", seating will disappooint.

But with Club Europe (J) you do get access to some of the best European lounges (the British Airways Terraces) on the outbound, and good lounges on the return, which include free bar, net access and relaxation spa.
[ But you get all that - and access to the FIRST lounge - as an AA Gold anyway(EDITED to ADD - NOT TRUE!! you need to be AA Platinum for lounge access).]

In Club Europe you get either a hot meal during the morning or daytime, with afternoon tea in the evenings (which is delicious BTW - sampled it last week). You also get your own quarter bottle of champagne.

Given your Gold status, I would risk it in economy, and hope for an empty ish flight, and just have some sandwiches in the lounge before boarding. Her eis the Club Europe service blurb:

http://www.britishairways.com/travel...r/public/en_us