I came to US on H1B visa in Feb'08 with my wife and 4 kids, they are all on H4 visa.
I got my W2 from my employer and I have file Faderal 1040 with W7 for my wife and kids.

I have also sent GA Tax return to Georgia Dept. of Tax and attached the Copies of W7 with it.

Do they approve the GA Tax or it will be rejected.
If it will be rejected then what will be next process?

They will either reject the tax return, or process it WITHOUT your wife and kid's exemption.

If they reject it, wait for the ITINs from the IRS before re-submitting.

If they process it, you will need to file Form 500X to amend the return to add your wife and children.

Atlanta Tax Expert,
Thanks for the reply.

If it gets rejected then I have to file again using the Form 500?

Yes, but this time WITH the ITINs filled in where the SSNs go.