The upgrades like what your co-worker reported are quite rare. You might be upgraded from coach to business if:
1. You have a very high frequent flyer status, but then you could probably have used the miles or the "instant upgrades" to get upgraded.
2. Economy cabin is overbooked but business class isn't. In this case again, the high frequent flyer status passengers will probably be called first.
3. Your flight was overbooked, and you volunteered (or were simply bumped) for a later flight. If economy is full or almost full, and business class isn't, you might get it.
4. If your flight was canceled, and you had to take a later flight. While rebooking, be very polite to the counter agent, speak in a low tone of voice. When told that "these upgrades are very rare", insist politely that the agent call a supervisor, never raising your voice. You don't want the person behind you on line to hear that, and neither does the agent.
5. As your co-worker has shown, an attractive female stands a good chance if the gate agent is a male. You can't compete with that, but you can dress nicely (jacket and a tie), and address all airline personnel very politely. That will increase your chances.
If you do get upgraded, get the agent's name and write a letter to the airline customer service department, mentioning the great work that the agent did for you, and that the agent is a great asset for the airline.
Kempa (not an airline employee).