I was on F1 (and then OPT) between the period Jan 1st and Sep 30th of 2008. My H1 was approved from 1st Oct 2008. For tax filing, I am planning to take the first year option for getting better tax return. I requested for tax extension and completed the SPT requirement in 2009 to qualify for first year choice. However, I have some doubts. If I opt for first year choice -
1) can I claim to be considered a resident alien for the entire 2008 and I file 1040 w/ married filing jointly?
OR
2) Do I get considered a resident alien only for the period Oct 1 to Dec 31 and file a dual status tax return? As in dual status return I cannot do married filing jointly, so I do married filing separately.

The tax returns are very different between these two options. So, I need some guidance to understand which one is correct.

Yes, you can file joint return as residents for the whole year. You and your spouse must report your worldwide income for the year.

Thanks for confirming that I can file as resident for the entire year. If I file as a resident alien for the entire year, would I qualify for Education credit (Hope credit) in 2008?

Is it mandatory to include a separate statement along with the form 1040 stating that I wish to be considered as a resident alien on the basis of first year choice?
If its mandatory, then I assume the only option is to file a paper return so that the statement can be included.

Yes, you need to include the first year statement. File paper return.

The residency choice statement IS required.