"One other question: Is there any problem setting up a Plat challenge in Australia with AA/SYD?"
You *should* be able to , but if they are as competant as AA in the UK are, then possibly not and you would be best just calling the US AAdvantage office.
"I thought I could use the VIPOWs to upgrade from D to A on AA transpac or Atlantic and extend the validity by trading soon to expire/not used via the Coupon Connection"
You can indeed upgrade from D to A using them. Just as long as you were not expecting to use them to upgrade on BA/QF/CX et al. You will need to travel 80k miles in Business class to attain Executive Platinum status. Thats a long DONE trip. If you are travelling 80k miles and do the platinum challenge ( takes only 8000 miles in J to complete ), you will get 180,000 miles to your account which will nicely give you a 1st class AU-UK round trip ticket. Ahh, the AA scheme; buy 1 business class ticket, get one free 1st class ticket
Dave