H1B convert to Green Card

thanks Wal-Mart. I just got a call from my Lawyer and he told me the same thing.

but one thing i am confused, why my I-765 was denied? I thought i have submited everything they need.
since i am still hold my H1B visa, if i need to travel outside the country, what document do i need? FYI, the officer took away my H1 approval notice during the INS interview, all i have is just the I-94 now.

thanks in advance!