Interesting thread, lots of good points above.
Like a few others here, I too have relied heavily on award flights for virtually all my international flights for many, many years. (Though I, too, have never had much interest in Avios; that may be changing for a trip next year, we'll see).
- I always book one-ways, rather than round-trips. The only times I have found high fees for doing that have been when using British Airways (anytime, but espcially when departing UK airports) or when on Delta (departing Europe back to the US). I generally don't fly much on Delta anymore, because their points are worth so little/their flights cost way too many points.
- Yes, I do book very far in advance. I don't mind doing that, it allows me plenty of time for trip planning.
- As shoeflyer suggests, being flexible - and, I would emphasize, also being creative - with your itinerary can make all the difference.
For example, I'll be going to Shetland next month. And Shetland is in the UK (though just barely!). My outbound flight was pretty easy (I'm flying American to LHR, then I have a separate onward ticket from LHR to Shetland). But I was having trouble finding a flight home that met my needs. Then I got creative, and found a great option.
I ended up buying a cheap nonstop flight from Shetland to Bergen, Norway (on Logan Air, the little local Scottish airline). It seemed counter-intuitive at first: flying due east from Shetland, to Norway, to get home to Seattle. But I found a great deal (award flight, in business class) from Bergen back to Seattle, booked on Air Canada points (via Frankfurt and Vancouver). The long flight (FRA-YVR) is in a very comfy seat, and we get a bonus 48 hours to explore Bergen. And it was surprisingly cheap. But it was not a routing I would have initially thought of.
IME, getting creative and exploring unconventional routings is often the key to unlocking good award flight options. It also often requires a positioning flight to get you from the place where your primary trip ends, and to where you can catch your flight home. But that is a feature, not a bug: we love doing that, and it has become our preferred way of building a trip...we get a few days in a "bonus" destination that we would otherwise not have had the opportunity to experience.
I now seek out such creative options when coming back from Europe. This is how we added on a few days in Alsace (after a trip to Corsica) last fall; and how we will get a few bonus days in Budapest this September (after a trip to Puglia); how we got a few days in Prague (after a trip to Sardinia); a few days in Krakow (after a trip to the Baltics); a few days in Istanbul (after a trip to Malta); and some more. After doing this many times, now if I book a trip to Europe without a "bonus city" added at the beginning or end, my wife complains and asks why not...so she clearly doesn't mind!
Bottom line: in my experience, award flights can be fantastic, and cheap. We use them on every trip. But getting something good can (usually does) require both creativity and perseverance. We are convinced it's worth the effort.
But I know lots of people who just detest the idea of playing the game entirely - and that's OK. As they expression goes, YMMV.