I really don't remember now, what is "the 3rd prong in NIW". Appeal was written by my lawyer, and he submitted it to AAO. He told me (before submitting) that there is not much hope, and we should wait 6 mnths to 1 year, and this thing about appeal not giving my family a legal status in US while waiting, but in last few days I still decided to ask him to prepare it and to send to AAO. So I did (Feb 2003), and a month later both me and my spose (we worked for same company) lost the job. We both were on H-1B and so in danger of loosing status. I managed to find another job (while being on an official non-paid leave: we lost the job because our company run out of money but they agreed to give us a non-paid leave to keep the status), I trasnferred my H-1B, and my spose and daughter became H-4. My new job is at University and I was planning to file another I-140 from there since I did not have much hope for the appeal.
Then (July 2003) my appeal was approved, and I filed I-140 to VSC (my new location) in Sep 2003. My spouse and daughter both got EADs (however not working yet), but I am still working using my H-1B.
Joo77, please be careful to keep the status. It is great you still have your H-1 and never used EAD, you are fine. If your spose used her EAD - she maybe out of status when you got the denial. The moment she started using EAD, she lost her H-4 (or whatever she was having), and it DOES NOT come back automatically. You will need to file a petition for her to adjust (change?) her status from AOS applicant (? not sure) to H-4 based on your current H-1.
I am not a lawyer, please consult a lawyer, but I think there is no grace period and you should do it immediately after you got your denial. INS should receive your petition (for your spose to change back to H-4) not later than next day after you get your denial (if there is no grace period). Of course they understand the real life... but better file ASAP. Be honest and describe everything. Tell when you learned about denial, and that you immediately started acting to keep your family's status.
As to what documents needed for appeal, yes, according to my lawyer it is good to attach any new evidence. In my case, I did not have any new evidence, and my lawyer wrote something which I did not understand (I am a chemist and do not understand lawyer's terminology) and which meant that INS did not correctly interpter the evidence we already submitted. I can try to find a copy of the appeal, but I need some time. Send whatever new you have, any new publications, conference presentations, patents (even provisional), find citations of your work by others. You probably got something for the time you have been waiting.
Trying appeal does not hurt, and you still can try filing another I-140, like OR employment-based, I think you can have several I-140s pending at same time (maybe without I-485). When the one will be approved, revoke another one to avoid confusion, and then file I-485.
Good luck!
