Well, the idea is to go on a vacation on my F-1. Come back, and then get an H-1/Change of status.
You could do that IF the new 20,000 visas (applicable to FY 2005) would last until July. If INS starts accepting H1B petitions from April 1, 2005, I doubt they would last until July. If the new visas reach 20,000 limit before your re-entry you can still change your status to H1B out of 65,000 visas (applicable to FY 2006), but you would not be able to start working for your employer until October 1, 2005, and you have to maintain your full time student status until that time. In essence, the advantage of applying for the new 20,000 visas is that you can start working for your employer immediately upon approval.
I have tried looking for rules about this, but everyone tells me a different story. Is there a 60 day period required to make any changes in the VISA status upon re-entering the US on an F-1?
There is no such rule. You can change your status from F-1 to H-1 immediately upon re-entry. The 60-day grace period rule applies to F1 students in the OPT period and it is not addressed in the context of "re-entry".
I am really confused about what to do. Any advice would be greatly appreciated.
H1B allows for the selection of a specific start date. Once USCIS starts accepting the petitions for the new 20,000 visas, you can petition for your H1B with a provision that your H1B period start from July X, 2005 (which is the day you are going to start working for your new employer). Your application will be approved within 15 days approximately if you go for premium processing, which every one should do at the present time as ordinary processing takes 6 to 8 months time for approval. If your petition is approved, your status will be F1 until July X and then H1B after that date.
Let's say if your H1B petition is approved in April or May and your H1B start date is July X, 2005. Can you travel home in May or June and come back and start working in July? If H1B is approved and the alien leaves U.S., he must get his H1B stamped at a U.S. consulate prior to his re-entry. Your H1B stamping becomes easier if you have the latest pay stub. If you don't have a pay stub your case will be the same as those entering U.S. directly on a work visa and the consulate people may deny your re-entry on H1B visa. If you have the latest pay stub, the chance of denial is very very minimum. You have to keep in mind that you will not be having a pay stub until July or August, 2005.
If I were you, I would start petitioning for my H1B in April and postpone my home trip until I get my first pay stub. If you are so desperate to go home, you should not petition for H1B in April and should do so after returning to U.S. in July, in which case you would be able to start working for your employer only on October 1, 2005. (on the assumption that 20,000 visas would not last until July, It should be noted that FY 2005 cap of 65,000 was reached before October 1, 2004. On an average 11,000 H1B petitions were filed and approved every month. If the employers file petitions at the same rate for the new 20000 quota, the limit will be reached in less than two months.)
There are so many things involved in your case. I suggest that you consult an attorney. Finally, you are the one who needs to set your priorities and proceed further.
Hope this helps. 
Thanks.
