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Thank you all for the clarifications. After hearing the latest developments, I am planning to cancel my trip. Many people are getting rejections at POEs even those who were coming back after vacation.

Thanks ginnu and gotPR?. Is it actually an extension of H1 or I94 happening when you request for extension? If it is I94, then again what 'gotPR' said may not be applicable here. Any thoughts?

But the question here is whether it is legal to go out while the extension is under process? OR Can USCIS reject a request because you are not in this country while your request is being processed? Since you are giving the I94 back when you exit, the status is tracable.

Here are my details: Reached US in Nov-2006 H1B expires on: 30-Sep-09 Familiy's visa H4 expires on: 30-Sep-09 Family is planning to go to India in: May 09 I am planning to go in July and come back with family by end of Jul Please advise me which of the followings is better. 1...