Thanks for your reply.
I had to change to H1B from TN in order to start Green Card application, since TN visa holder is not allowed to do that. My main concern is as Canadian citizen, is it required by law to have H1B visa stamp on the passport in order to come back to US... or the presentation of I-797 will be enough? I do understand I-94 has to be surrendered everytime when I am out of country since its not proof of status any more as TN visa holder.