H1-B Visa Expired - Cap Exempt

[need_visainfo]

I stay in India. I had my H1-B Visa (validity Aug 2007 to Sep 2010), which got expired by Sep 2010.

I have never used my H1-B Visa and the Visa is no longer valid. This H1-B Visa is from a Company A.

1) Now Company B in USA is ready to hire me and would like to process H1-B Visa for me by applying for CAP Exempt (since my H1-B Visa was already approved in the quota then and has not been used).

What is the CAP Exempt process and am I eligible for that?

2) I am now working in India for a Company X and I got a B1/B2 Visa recently and traveled to USA on Business visit for 1 month. Now the Company B in USA (who is willing to process my H1-B under CAP Exempt) asks me to come down to USA on B1/B2 Visa. Company B says that they will process the H1-B CAP Exempt while I am in USA. So, can I change my Visa status from B1/B2 to H1-B in the USA? Is this a valid process? If Yes, when and where the H1-B Stamping will be done for me? Should I get the H1-B Visa stamping done in India?

Please clarify.