Ok, just got back, it is ONLY the games in the top 1000, the other games do not count.
The discount is in the system and it only triggers if both games are in the top 1000. If they are in the top 1000 it applies a promotional price and raises the trade in to $12.50 per game.
You also need to make sure that the person turns on the discount before scanning your items, if they don't turn on the discount (though a popup menu on the top left) then it only does the standard trade in rates, and it doesn't retroactively apply the promotion.
There is also no limit on the number of games you can trade in.
Thanks for the info! There are still some solid opportunities in the top 1000. Now to look over that list again...