EAD
1) If I get an interim EAD will that mean that I can work on this interim EAD and no longer need H1-B...and hence can stay in the country??
Once you have filed for the Adjustment of Status (I-485), you can stay in the country. EAD allows you to work fulltime so you can use it instead of your H1. Remember though that your I-485 application and EAD will be revoked if your 1-140 is denied for some reason. I believe it's better to maintain the H1 status as long as one can.
2) Can I-485 be applied along with I-140 or do I need to wait for the receipt of I-140?
For eg if I apply I-140 & I-485 on 05/15/03 can I expect my EAD to come by 08/15/03..or is the receipt date for I-140 considered the start of the 90 day period??
You can file I-140 and I-485 at the same time (that's what concurrent filing is all about ). The 90 day period starts when your application for EAD is received at the service center. If your application is received by 5/15 and you don't get your EAD by 8/15, you can get an interim one from your local BCIS office.