Villa upgrades are pretty rare in the Disney Vacation Club world. High occupancy levels are the primary reason--timeshares are designed to be near 100% occupancy year-round.
But DVC does retain a small inventory of unreserved rooms which can be used in an emergency. If a maintenance problem takes a Deluxe Studio room out of commission for a couple of days, some lucky guest may find him or herself upgraded to a vacant One Bedroom.
Topic: Have you ever been upgraded during a DVC points stay? If known, what were the circumstances of the upgrade?