I am on a second J-1 visa. My first was June 2000 to Aug 2001. I then lived in the UK until Aug 2007. My current visa has a 2 yr home residency rule - but I thought I couldn't have that on a second J1. I would like to transfer to an H1b but I cannot until I get a waiver for the 2yr HRR does anyone know how to or how difficult it might be?

It depends on the authority who sponsored your J-1, if they agree then it should not be a problem.

The university sponsored my J-1 but I thought it was up to INS to decide if HRR has to be obeyed?