Sadly I was honest with her and it ended in real tears - she was upset and said that it was her retail therapy money gone and it had soured the trip for her. She feels truely ripped off.
Whilst I know we made the mistake - for a £12 fare difference over £200 penalty just feels like a bitter pill to swallow. However I told the Virgin call centre agent to go ahead with the changes as I couldn't have sat in my seat knowing Mrs BrummyGit was elsewhere on the plane, on her own and feeling miserable.
My post was just to warn others that there are differences between online booking and the call centres, and that Virgin (and I guess most other airlines) are really only interested in your money despite what you may perceive from their reputations and marketing.
I have written to Virgin customer services to tell them how I fell but I don't hold out much hope.