I came to US in March 2009 on H1b along with my wife. She is on H4 as dependent visa. Its already feb and I want to apply fro ITIN. So how I can proceed so that I can file my tax returns and her ITIN before April. I am in Georgia at present.

Complete you tax return as residents (joint return). Attach W-7 (ITIN application) and mail the return.
File Georgia return after you get ITIN. If needed file for extension.

But I can't apply the joint return online on turbo tax. My refund money comes out to be very less. Is it because my wife don't have ITIN. Does tax return has particular form? How to apply fro extension?

You CANNOT file for an ITIN on-line; the Form W-7 MUST be mailed with the tax return and with a notarized photocopy of your wife's passport stapled to the Form W-7.

In order to apply for your wife's ITIN number you need to submit both, your tax return (with your wife's name and information on it, leaving the space provided for the SSN/ITIN number in blank, it's fine) and the W-7 application for the ITIN number.
In order to apply for the ITIN you'll need to present your wife's birth certificate and a valid identification, in this case, her passport. Mail copies of them.
Everything has to be paperfile. You can't apply for an ITIN online.
The whole process takes about 2 or 3 months; however, this year the IRS is taking less time to process everything, so you might get the number faster. Your refund comes days later after you get the number.
Hope this answer your question.