It is really hard to tell if they need Volunteers, but it does happen.
Usually they will put you on a VDB list at the airport - check in can do it, but only at the gate at the end of the boarding process the Flight manager will decide if they need VDB or not.

Standard compensation is:
- 600EUR cash or 700EUR Voucher on LH Metal
- Hotel accomodation at Steigenber or similar
- rebooking on next available flight
- meal vouchers (about 35EUR)

Upgrades are usually hard to get on the alternative flight - however I have been succesfull with that once.

Thomas