Using US Credit on AA
 

Has anyone been able to apply US Airways flight credit from a cancelled non-refundable flight towards an AA itinerary (not codeshared)? I had a hard time getting upgrades the last time I booked US flights on AA.com so I don't know if the same situation applies when booking AA flights on US

2nd question - how do I go about applying the credit when booking?

You can certainly try, but remember that US and AA have only merged frequent flier programs at this point. The rest is still mergING. Your difficulty with codeshare upgrades is linked to the fact that they are still operating two different airlines with two different reservations systems. I imagine this goes the same for payment. My only similar experience was with CO/UA. I had a credit with CO from a canceled trip that i could only use on CO operated flights until long after the merger. But give US a call and see what happens. These kinds of data points are helpful to everyone, so be sure to report back!