Canadaflyer -
I am not aware of any airline that gives Elite status without flying. Flying is their business and Elite status is a way to reward people who patronize that main business.
There are many people here (and I wonder what % of FF programs overall?) that collect many miles with out ever leaving Firma Terra. I would guess American has one of the best programs for collecting FF miles and never flying (all sorts of partner programs)
As for Elite upgrades, all programs vary. Most reward Elite flyers after flying at least 25,000 actual flight miles a year level with a "silver-level" status. It varies by airline - with United awarding 4-500 mile segment upgrades for every 10,000 actual miles flown, to Northwest with unlimited domestic upgrades (of course if every elite has unlimited - you can see the supply/demand issue there...)
Airlines sell FF miles to companies (MCI/ATT/Flowers.com etc) and make a lot of money doing this - so these companies can "give" miles as promo miles. These can be used in FF programs just like any other mile (for free tickets, free upgrades etc) but these are not status miles toward Elite. Only paid actual flight miles in the air *usually* count toward "Elite (Silver/Gold etc) status.
There are exceptions of course - but in most cases to sit "free up front" one has to ride a lot "in the back".
MSP Flyer