Yes, as far as I know you can have only one visa status at a time. If he uses his H1 (i.e. if he starts working for the employer who sponsered his H1), his L1 will be revoked.
I applied for H1B when was in india.
now I am in USA on L1 (valid till 2007) and my H1 petition is also approved(oct 1st 2005)
1. Can I have 2 petitions with me now
2. Can I discontinue working with my L1 Company now
2. Can I start working for my H1B Company now
3. Do I need to go back to India or Canada or mexico for H1B stamping to work for h1b company
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