Came to US in Jan 2003. Am resident alien 2008. I married in end of 2007. Was student during 2008 on F1 and changed to OPT from 23rd Dec. Wife is on J1 in another state and she has been here for 1 1/2 yrs. What forms should I use for tax returns? Is it beneficial to file jointly? Can I claim standard deductions and exemptions according to India treaty? Pl. let me know.

For 2008, you can file joint return as residents. You are not eligible for treaty benefits.
Or

You can file married filing separately as resident and your wife files as non-residents and get J1 treaty benefit.
Read Your U.S. Tax Return: The U.S. Visas

Since you are both from India and get to claim the $5,450 standard deduction in any event, it's possible that filing separately will yield the SAME tax savings as filing jointly.

The key issue will be whether you are paying tuition costs. If you file jointly, you can claim credits and/or deduct up to $4,000 of those costs from your JOINT return.

If you file separately, your wife CANNOT claim those deductions/credit because she will file as a non-resident alien.