It depends on the person and the situation. Some folks have multiple lines in their name with one almost always up for renewal. Some are willing to pay full retail. Some are using the last of their new-every-one year upgrades that Verizon has discontinued. Other's have sold their "old" one on E-bay or Craigslist and then bought a new one from someone the same way. In short, there's so many different ways to "trade up" that anyone can do it, it just depends on how much money you're willing to shell out or how much trouble you're willing to go through to get it.
In my case, I traded up from a Thunderbolt to a Droid Bionic in a kinda different way. After I kept having problems with my Thunderbolt and it came time for a 4th warranty replacement, I had a long conversation with a representative who allowed me to replace my existing phone with a better one.. Mind you, this wasn't their (Verizon's) first offer but after some discussion we came to an agreement that I'd had enough problems and it was time for something to change in the interest of customer service on their end. This took time over several days on the phone to accomplish and I didn't expect to be able to do this, but I did get an upgrade for my troubles without really even looking for it.
So, if it's worth it to you to trade up (or you're having too many problems with your old phone) there's always a way.
