Questions about H1, H4 and EAD.

[waitfor140]

I am in H1B status. My I140 and I485 are pending with INS. I have EAD in hand but I am still in H1B. My wife’s I485 (based on my I140) is pending with INS and she is working with her EAD (based on her I485), so she is not H4 any more. My questions are:

1.Can she change to H1B status in the US.
2.Someone told me that she could only change to H1 status by applying H1 outside of US (say in Canada). Is this true?
3.If my I140/I485 get denied, can she change her status back to H4 (suppose I will be still in H1) in the US?
4.If she must go to Canada to apply her H1 visa, is there any chance the application get denied or delayed. If her H1B visa application in Canada gets denied, can she reenter the US with the Advance Parole?

Thanks