Hi Sir,
I am currently working in USA on L1 from June-2008 for company A. I have applied for H1 this year and application got approved. And main thing is at present I don't want to convert to H1 for some time. Could you please guide me what steps I have to take to continue without having any problem for L1 and H1 visas. ( I heard from October 1st onwards I cannot work for current employer and one more I heard is I have to go outside of the usa and return again). Please clarify my doubts please.

H-1B term begins in October, so if you don't get your visa validated, it will be revoked.
Talk to your employer and the attorney who handles this case, they might be able to help.