Is it true that Virgin regularly overbook PE and if you hold a PE ticket and check in after all PE seats have been given I will be downgraded?[?]
There is truth in what you say, but it is not the whole story.
All airlines overbook as a matter of course. Personally I don't like it, but it is a necessary outcome of offering flexible tickets. If you are on an overbooked flight then the airline may ask to down grade you, and they will offer generous compensation. They may also move you to another flight (with the airline your booked or another) and once again offer compensate you. Or they may delay you, and again offer compensation. Or, and cross your fingers here, they may offer to up-grade you (although there is a pecking order on this with golds at the top of the pile!)
Either way, down grades are not common - as common as hen's teeth. So please do not worry yourself. Remeber also that you can use On Line Check in, if the possibility of being bumpped is a concern. It doesn't guarantee that you won't be bumpped, but it makes a difference.