My wife came to US on H4 based on my H1. She applied for H1-B and got approved for Oct 08. She has all the pay stubs from Dec 08 to till date. She wants to convert back to H4 from H1. My questions are
1.As her H4 visa is valid until Sep 30th 2009, can she go to Canada in August 2009 and reenter US based on her old H4 visa? Any risk with this option? My H1-B is valid until Aug 2010 and my H1-B visa is stamped until Sep 30 2009.

2.If she applies for COS (I-539) and if she gets a project while COS is in process, can she withdraw the COS application and continue on H1-B and start working for the project ?

3.Who should apply for I-539 (employer or my wife) ? and if she applies for COS say today, can she stop working from today or does she need to have pay stubs until COS is approved ?