The core book say to increase purple difficulty dice to fit the situation under perfect circumstances and then add setback dice for anything like darkness/smoke/chaos. So for a picking a lock the only way (according to the core book) to "upgrade" the difficulty of that roll (switch a purple for a red die) is for the GM to flip a dark pip. (Of course for piloting and NPCs talents their are ways to upgrade but I'm talking about rolls like climbing or fixing a vehicle (and if you run out of purple dice)).

But then... I see in some of the adventure modules they suggest using multiple red dice for some rolls. Now I'm confused. So I've just determined that if rolling a despair in a particular part of an story would be interesting I'll throw in some reds, or if something really bad could happen for what they are doing. For instance fixing a communicator- no reds, fixing a grenade- REDS.

Upgrading purples to reds can represent an inherently dangerous task. What you describe with a grenade is good.

Here's another example; suppose a character is trying to jump a decent gap, say three or four feet. That's probably worth two purples, with one or more blues for a running start. But if that gap is between two crumbling cliff faces high in the mountains, or two speedercraft hovering over a lava flow, I'd make one or both of them reds instead. The task might not be inherently any more difficult, but the stakes are much higher and the character will be nervous to attempt it.

You're free to upgrade at any time, as noted. Yes, environmental effects are usually in the realm of setback dice, but climbing an icy cliff might warrant an upgrade because the results could be more severe. Or a lock might have a difficulty of PP to pick, but maybe the lock has been tampered with by an NPC who's inserted a trap, so GM is free to upgrade the difficulty to RP.

That said, I find using the destiny points is often enough. I flip regularly and often, usually saying something like "looks like you guys need some white points to work with, let me help you with that..."

Upgrade dice whenever you know exactly what you’d do with a Triumph or a Despair.