Hey, DLFan,
I just phoned DLR ticket office, and read off my old ticket number [that had been purchased using air miles] to them - she figures it would have been upgradeable [sniff, sniff, I missed the boat!] The back of my ticket did not state it is not upgradeable, plus, it shows the 'cost' of the ticket [at the time, there was an air miles sale that coincided with the reduced rates of the current Disneyland sale. The cost of a child ticket showed $149, and the adult ticket showed as $179, so for $280 USD more, we could have done the annual upgrade for the 4 of us. If only I had found mouseplanet at that time. 
Anyway, the current 5 day park hopper pass from air miles will likely show up in their system as being only $10 cheaper than the annual pass, [if you buy your park hopper pass through air miles when there is not an air mile sale, or 'special' offer on] so it may be worth it to save up for the air miles 5 day pass, and go from there to do the upgrade. Not sure for you which route to take now - for us, we want only to go to Disneyland, and 1 trip to Universal during our stay. It may pan out better for you to buy the Citypass so you can also visit Seaworld, and buy the reduced bus transport $72 deal. On the other hand, Universal has online, where they provide a free shuttle to Universal from your hotel if you buy your ticket online, and once at Universal you can upgrade to the front of the line pass if you so wish. I'm not sure for how much more $$ that one is.
I don't think it took long for the DLR tickets to arrive - perhaps 7-10 days? I don't recall, but I would order them soon if I were you. I would also photocopy my tickets, [bar code, in the event you lose them, it is the ONLY way they can reissue them] and make sure you sign the actual ticket, too. I learned this from mouseplanet, too! 
I am from Alberta, and we plan on going in November. November gets pretty chilly and lots of snow, so it will be a great time to head to the warm Californian sun!
Take care, and thanks for sharing any of your info. with me, too, I appreciate that!
Edited to add: I also asked if the reason that they could allow the Citypass upgrades to annual pass was because they don't state on the back of the citypass disneyland tickets that they are not upgradeable, and she said yes. I'm not sure what ticket puchasing event would lead to a ticket saying it is not upgradeable, but maybe any sort of free bonus pass?
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