I think when the user adds an item your cart , that`s when the upsell should happen, or when they`re reviewing the order before the final check out.
Example: I add a digital camera, when I view my cart it suggests I add a memory card, or insurance package.
I think this is one open issue with the internet, people don`t want to be hammered with up selling and its easy for them to get upset and leave. However when your at McDonalds your pretty committed to making a purchase and it`s ALWAYS harder to say no to a person over a computer page.
Apple up-sells by email, general advertising, press, at their web site and any where else they can after they make the initial sale. It never stops but is tasteful and you do not realize it. I think their methods are very effective. I think up-selling during the order process should only be done is small amounts so as to not kill the original sale. Some companies like Dell get carried away. Many of our customers’ up-sell when they send shipment notifications which can be very effective too.