Hi I am also furnishing some more information for the questions I asked to get the corect answer
1) I arrived at US on 26th August 2007 on L1 visa
2) I have got an SSN
3) My W2 states that my taxable married status is 'Single'
4) My wife has L2 visa and a resident indian and has never visited US and No SSN or ITIN.
Now the following are the updated questions
a) Should I file a return before 15th April 2008 to get refund? What is the cut off date for me
a1) If I have to return to India in March, 2008, what is the option for filing the return and getting the refund?
b) Under resident alien -What is the earliest date, I can file a return?
b1) If I choose to file as a NR alien what is the last date?
c) What is the last date for filing the return under 1040 or 1040NR?
b) Which status I should use 1040 resident or 1040NR ( Non resident)
c) Should I file Married Jointly or Married Separately?
d) What should I write in the place of SSN for my wife in 1040, if I choose to file 'Married Separate" Can I file as "Married Separate"
d1) If I choose to file Married Jointly/separately, should I have to wait till I get the ITIN for my file to file 1040 or can I attach the W7 along with 1040?
e) Shall I file 1040 leaving SSN for my wife as blank and submit W7 along with it?
f) If I choose e) above, to which address 1040 and W7 to be sent?
g) In case of f) will the IRS filling my wife ITIN number in my 1040 and process it?
h) What happens if I leave SSN field blank for my wife in my 1040 ( married jointly) and file a return? Will I get a refund?
I) If my wife to get ITIN, is it necessary that all the pages of her passport to be notorized by an Indian notary public or is it enough if the first,last and visa pages are notorized?
j) Can I give an India address for getting the refund
k) Can I give an India address for ITIN receipt?

Before I answer anything else, I need to know HOW you were paid, from your employer in your home country or by a U.S. company or U.S. subsidiary.

While the employee is on per diem mode ( US company pays 100% of the taxes), the US Company calculates and pays in the right amount of tax to IRS based on the employee's Asia wages (The US company has a subsidiary in Asia).
This is the amount that is reflected on the W2 of the employee.