i) How hard would it be to file the AC21 (what documents, how much time it takes, can I start while it is being processed, lawyer fees and filing fees, etc.)? I want to know if it might discourage the new employer from agreeing to file it.
You don't need to file anything, unless the employer revokes the I-140. And filing it is as simple as sending a letter from the company with your job description, to show that the job is "same or similar".
2) My current understanding is, the new employer would have to re-file LC, I140 and I485 in order to continue my greencard sponsorship. Is this accurate?
The new employer wouldn't have to do any of that. Avoiding that is the purpose of AC21.
3) My current lawyer (law firm retained by employer) said that since my PD is current, we could expect to hear a final decision (approval or denial) by next year. Although this is music to my ears, I have doubts about it, since it would mean that I could have a GC after just 2 years of starting the process from scratch. Do you agree that what the lawyer said is possible (assuming there will be no RFE's or other delays)?
Are you in EB2 ROW? It is not uncommon for people in EB2 ROW and EB1 to run the green card process from start to finish within a year.
4) Let's assume that I lose my job abruptly (either because I quite or I was laid off) by the end of this year and my employer withdraws the approved I-140:
i) Will I still be able to do an H1B transfer with another employer if I find the job within 2 months? If so, what steps (if any) should I take to guarantee that I'll be eligible for this? Also, does the job need to be related to my current job?
Yes, for AC21 purposes you can do an H1B transfer and it would have to a job that is "same or similar" to the original one. "Same or similar" applies to job duties, not detailed skills like Java vs. C.
But I would STRONGLY advise you to get an EAD, so you can get hired with that instead of an H1B, if the next employer doesn't want to do H1B sponsorship. Some employers will run away if you say "H1B". With an EAD the burden of Immigration paperwork on the employer is nothing more than filling out an I-9 form, which also has to be done for citizens and GC holders anyway. And given that you filed after last summer's fee increase, your EAD and Advance Parole are included for "free" in the all-inclusive fee that you paid. So HURRY UP AND APPLY FOR THEM if you haven't already done so! And don't tell employers about your EAD until
after you've already start working for them. If they ask about your status before hiring you, see this thread:
http://immigrationportal.com/showthread.php?t=281144
Will I be able to save my current !-485, assuming the employer agrees to sponsor?
Once you are eligible for AC21 and have an EAD, the employer doesn't have to "sponsor" anything other than agree to hire you in a permanent position (of course, permanent doesn't mean lifetime, it just means it is expected to be an ongoing employment job, not a contract job with an expected end date). Don't even worry their head with the AC21 letter until and unless you find out that your I-140 has been revoked. In that event, just tell HR that Immigration needs to verify your employment status so you can continue to stay legally in the US, and you need a letter describing your job duties and salary.