Your understanding is pretty much correct.
You can waitlist from 90 days before your flight, until 24 hours until your flight.
Your chance at getting the upgrade relies on a couple of things - your FF status with Qantas (OR the FF status of your "donor" of the points) and the busyness of the cabin to which you want to upgrade to.
(Of course the original booking class does matter.. but you already know that)
You will normally know your success somewhere between trip-24 hours and trip -5 hours. Most upgrades are confirmed the night before travel. It is easy to check - either
www.checkmytrip.com or Qantas (check my booking) will show you the success of your upgrade.
Personally I think upgrades are the best use of FF points. It's a little bit of a pity that the changes in 2005 ensured that the cheapest fares aren't eligible for upgrade but that's the way the scheme goes...
My tips to you:
1. Do you have a relative (Husband/Wife, Parent/Step-parent, Domestic Partner/De Facto, Child, including foster & step-child, Brother/Sister, Half Brother/Sister, Grandparent, Grandchild,Son/Daughter-in-law, Brother/Sister-in-law, Father/Mother-in-law, Uncle/Aunt, Nephew/Niece, First cousin) who has a higher QF status than you?
2. Either you or your relative (whoever has the higher status) needs to register exactly 90 days before your flight. Sometimes you need to call up rather than applying online on the 90th day due to the website not letting you register.
3. Sit in hope. if you followed point 2 your chances are as high as they will be on your particular flight. If you have flexibility in your choice of flight (which I assume not seeing you've already booked) there are certain flights you can choose that may improve your chances a little.
Best wishes for a nice upgraded seat
(Also you should re-read the following URL to make sure you understand the upgrade process for international flights.
Frequent Flyer - Using Points - Flight Upgrades