I also had a bad experience on an Iberia flight, IB 3166, 29th June 2007, 16:30.
We had already spent 2 days traveling back from Peru and were on our last flight from Madrid to London Heathrow.
We were on the tail end of the queue for boarding, so when we climbed aboard the plane we discovered our designated seats had been filled with other passengers. We looked about in economy for empty seats, but there were none.
We decided to walk to business class and sit at the very back. A few moments later the air stewardess in business class came over to us and asked to look at our tickets. We explained our seats had been taken in economy and these were the only seats empty. She then very rudely asked 'Do you want ME to find you a seat?!' Jana replied, 'Yes please.'
We followed the air stewardess back into economy where, of course, there were no empty seats, and then left us stood in the gangway in front of all the other economy passengers and went back to tend to the business class passengers. After 5 minutes I started to get quite angry at the way we were being treated. After all, we were fare paying passengers and had originally been given a designated seat number. I asked an air steward if we could take a seat as we had paid for one on the flight, and if we sat in business class they did not need to serve us any drinks or food. He said very little and went up to business class.
Finally the air stewardess came back into economy and moved a lady in the front row of economy into business class and seated Jana in her seat. I was then split from my friend and placed in business class on my own. Bizarre.
Why give passengers a boarding pass with a designated seat number, only for it to mean nothing when boarding the plane? No apology was given at the lack of seats and we were made to feel unnecessarily awkward for no reason.
Also, why split myself and my friend up for no apparent reason, by moving another lady from her seat? I did look for the air stewardess as we disembarked from the plane at Heathrow so I could ask for her name, but she was nowhere to be seen. She was not even there to say goodbye to her business class passengers.
When I arrived inside the terminal, I then discovered my luggage had been lost. I then queued with many others whose luggage had been lost on the flight at the Iberia desk which had only one member of staff dealing with us all. Nobody else was there to help, and therefore it took well over an hour.