This definitely sounds plausable, and Continental at least did the right thing (from my perspective) by allowing the web services agent to go back and oversell T class.

My concern, though, is twofold: (1) What would have happened if I didn't catch this--would I just have automatically been billed the higher amount (which seems to be what the web services agent told me on the phone, since there was already a charge towards my credit card for the higher amount), and (2) I purchased this ticket about 30 minutes before the hold was going to expire--would I have lost the reservation if they hadn't gotten around to ticketing it off of the "bounce" queue?

Also, although the "bounce" queue seems reasonable, how come the first reservations agent could not see this in my PNR and inform me accordingly (all she saw was the higher-priced reservation)?

I'm heading to the CTO right now to get a hard-copy printout of my receipt (hopefully showing the correct price) and make sure everything is OK.