Hi,
I am in US on B2 Visitor visa - I would like to study here and apply for F1 - is that possible while I am still in US - would I have to go to my home country or Canada for F1 stamping? Will it be an issue or complication when re-entering again?

Please advise

Yes it is technically possible, but it may not be desirable, as there could be risks in re-entering the U.S. after foreign travel. Therefore it is better to avoid switching from B2 to F1, especially soon after entry into the U.S. even if the USCIS (INS) initially approves the change of status to F1. For a situation like this you can contact an attorney.

It is possibble to apply for a change of status from B1/B2 to F1.
The normal processing time for a "change of status" is between 100-150 days*.
The rule lets you to apply if you can still stay for another 45 days* according to your original I-94. Once you have applied you can legally stay in the country till you hear about a decision from the Immigrations department. If it is an approval, good for you. If otherwise, you will be asked to leave immediately*. N if you have overstayed, you are considered to have been illegal for that long.
I would say apply for a change when you still have about 150 days on your I-94 to be on the safer side. To avoid further issues in future.
The success of the application would depend on how genuine your case is, if you can account for the huge amount of money you would have to spend being an international student and the person who gets the privilege of handling your case at that time.
The ideal way to go for an F1 if you already have a B1/B2 and no time left on your I-94 is to go back to your country with the I-20 from the prospective college and come back on a visit and mention it at the POE that you are a prospective student.

:) Good luck.
* Please note that there could be changes in the number of days mentioned above. For any information you could call up immigrations help desk or check on the official website.

So if I have to be in the usa for only 3months and back to my country but on a 5-year b1/b2 visa. What will the process be like.

Also if I come back to my country with an 1-20 and see the consular, does it mean my visa will be revoked and changed to a f1 visa or will maintain my b1/b2 visa and change at the port of entry.