It really depends on your view of the world, and how many points you have. If you have heaps of points to spare, international upgrades are good value.
An upgrade to Europe represents in the order of $6000 for 100,000 points which is excellent value, but I personally would rather put up with Y class, and save $2000 or spend the points on other trips, as I would not normally pay an $8000 fare.
Domestically, best value is on journeys involving connexion, particulary those without through fares from your point of origin (usually regional destinations), and on routes not yet served by Virgin Blue. eg east coast to Broome/northern WA, Melbourne-regional NSW (eg Grafton, Coffs, etc), Tassie - NT etc.
Also, I found in American Airlines in US is good value, as the same points scale applies as does Qantas domestically. I used 20,000 points for a fare from NYC - Florida at short notice, when the cheapest fare I could find anywhere (even on the low cost carriers) was over A$700!