Well I can now shed a LITTLE light on how this process works. Yesterday my TA called all excited because he had gotten a fax from HAL. It offered me the upgrade for a pretty steep discount, so we took it.

What I don't know is: How many people were offered the upgrade before me? Is the upgrade offer order based on Mariner status, price paid for your booked cabin, date of booking... what? Is the upgrade price fixed (for example does everyone going from S to PS pay the same, or is that also based on how deeply discounted your original cabin was)? If no one takes them up on the paid upgrade do they cycle through the list again at a lower price? If no one REALLY takes them up on the paid upgrade would they bump people up for free at boarding or let the higher category cabins go unfilled? For instance, I can see them bumping people from an inside to outside but they may want to maintain the "integrity" of the PS and would rather it go empty than give it away.