B1 to H1B Transfer while in USA

[p_m]

Hi Everyone

Here is my situation : I came to India for H1B Extension Stamping during 2010 December, extension stamping got rejected due to paperwork issues ( Changed end client after the H1B Petition got approved , but new end clients name was not appended in the petition during stamping..thats why the USA consulate did not approve the extension ). I am working in India and got a 10 year B1 VISA ( already made one trip to USA on B1 during Feb 2011 to May 2011).

Now, I got an opportunity to travel to USA on B1, and since I have an H1B petition (old one, which was supposed to expire this year end...December,2012), this new employer is planning to file for H1B Transfer while I am in USA later this year.

Here is my question. Is it legal to file for an H1B Transfer while I am in USA on a B1 Visa( specially in my case) . Plus , though I have an old petition which was approved from 2009 Jan to 2012 December , I could not stamp it. So, if I file for H1B Transfer, they would consider it as a transfer or a fresh filing.

Thanks in advance for helping me out.