I think John26 is concerned with the scenario of a 747 being changed to a 777 which has fewer C seats therefore a real risk to being downgraded in this scenario.
I guess one of the real issues is what happens if for any reason I (or John26 !)lose my confirmed C seat (equip change/flight cancellation/missed connection etc) through no fault of our own. We have typically paid a fair bit more for our HoMeBoY fares specifically to be able to upgrade so are obviously going to be rather miffed if we lose out. I for one would want the difference between the 'B' fare paid and a cheapie Web fare if I lost my C seat through one of the above scenarios.
I had a concern recently about losing my confirmed C seat due to a very tight connection at SFO. (in the end we were lucky as weather was fine on Saturday!) I had varying responses from FTers and UA reps ranging from 'tough luck - why should UAL give up a C revenue seat to a lowly economy customer' to 'of course we'll protect you in C if you miss your connection'. Clear as mud!
So, when is a Business Class confirmed booking a Business Class confirmed booking? My (lowly eco class customer) point of view is it SHOULD be - once you have paid your HoMeBoY fare, given up your miles and have your upgrade confirmed then you should be entitled to a business class seat as long as you keep your side of the bargain (i.e. turn up at the airport in good time etc etc). If the airline screws up or weather goes bad then they find you a C seat on an alternative flight. Of course sometimes this isn't possible if they are dealing with a major winter storm or whatever so you get some form of downgrade kit or compensation - whatever is standard for a regular C class pax. You shouldn't, however, have to go back into the upgrade lottery pot - if the seats are available then you should be first in line having ALREADY scored the upgrade confirmation - not having to wait at the gate hoping a 1K doesn't turn up at the last minute with a cheapie fare and a SWU.
I personally ensure I have a FAXED confirmation of my itinerary which shows the confirmed upgrades. Not sure if it would help in an emergency however an official bit of paper certainly outweighs 'well the agent I spoke to said I was upgraded' if something goes wrong and shows you are well prepared and less likely to be fobbed off.
Finally (Rant nearly over)
I too am keen to understand what happens to confirmed upgrades if part of an itinerary dissapears due to service cutbacks. Would UAL cancel the whole itinerary and give you the money back or would the try and work around the issue. I have a LHR-SFO-RNO booked for March. If for some reason SFO-RNO dissapears (I understand this is unlikely but you never know) I don't want them to cancel the LHR-SFO as well - I'll just drive the 192 miles!