I was in the similar situation last year, Let me give u brief history and you decide what is best for you. My OPT started from July of 06, in july 06 i applied for H1 via one dhoti consulting company. But turned out the employer was not very ethical and they left me in limbo. After being fraustrated with their activities i decided to cancel my H1b application at the end of august. I submitted a cancellation request of my H1 and to leave me on my OPT which was good until July 07. I submitted cancellation and went to work for another employer. In march of 2008 i received an H1 approval notice from INS with the same employer i had requested to get my H1 cancelled from. I was already with another employer by then but fortunately my new employer worked hard with his lawyer to get the approved H1 transfered to my new company. The new h1 got transfered without any paystubs and now i am in status in H1. I was able to transfer my h1 because i think INS considered me not having any pay stub cos i never really worked for the first employer. So look at what happened to me and draw ur own conclusion. I suggest u do not cancel ur h1 cos INS is so busy with other stuff that they charge fees for that they wont even look at ur request. Had my new employer no being able to transfer my h1 i would have been out of status today. Your H1 will be effective from 1st of oct ( google last action rule in INS ) Until then you are allowed to work for anyone else and transfer your h1. Consult a good lawer cos this is complicated issue if u cancel ur H1. I am writing this cos i know how you feel. Goodluck