--J1 is legal, but if you want got GC, you have to do J1 waiver before you get approved, otherwise your I-485 might refused. Once you did J1 waiver, you will be either pure AOS using EAD to work, or H1 or H1/AOS (dual status) using H1 to work. The 8M working does not affect your I-485 since you have J1.
No. 2: I am now working in the state governement. My employer wants to sponsor my H-1B visa. I am just wondering if it is useful for me to use H-1B. I have never applied for H-1B visa. I have already used EAD before H-1B and wondering if the application of H-1B visa would affect my I-485 or status.
--If I-485 was refused, using H1, you can keep your
status, if you used EAD, you have to leave this country or to do sue. So H1 is better than EAD.
Since you are AOS, if you get H1, you still need go out of USA to apply H1 visa to obtain H1 status, if your H1 approve notice without a I-94 form.
H1 or EAD do not affect your I-485 .