From my limited experience, the flight has to be full, and then some logic is applied to determine who gets the upgrade. I suspect the logic has also changed over time, and what applied a few years ago may not apply now.
I am guessing the algorithm has two passes: 1. select who'd get op-up'ed, and then 2. allocate the seats.
The selection obviously largely depends on status, and I think the fare class plays a very minor role. A few times me & wife were on Red E-Deals but still get op-up'ed. (both WPs). I agree there are various factors to calculate your value to QF and I suspect one of them _is_ the company you work for. Wife's got both WP and paid QC under her company's name and she gets op-up'ed like 50% of the time. (then again she also travels 3-4 times a month).
The allocation of seats seems to be dependent on the order of when you check-in - i.e. first come first serve. We've managed to get 1A/1B once when we got to the airport early (like 4 hours early - not intentional though).
Hope this helps.