First Time H1B stamping in Toronto for a Canadian Citizen

Well, you need to enter US with your I-797, at which time you will be issued an I-94 as proof of your entry status and authorization to work.

You H1 is NOT subject to adjudication at the border. You simply need to meet the general entry requirements (not a criminal, not under a 5- or 10-year ban, etc).

Suppose my Employer applies for H1B this year 2010, and mentions start date early next year when my TN expires. If I get approved and I want to cross the border between the date of approval and H1B start date, would it be advisable to cross the border? Is it safe? Or should I only cross the border only once at the start of H1B date and adjust the i-94? Would the US border guards know that I do not want to change my I-94 up until H1B start date?

Is it safe at all to across the boarder during h1b approval date and h1b start date?

You h1 process has no beqring on your TN validity. You can cross freely. It does not impact your H1 either, whether you cross before or after approval.

Whethwer or not you would "want" to start H1, you simply cannot until the validity date, so you have no choice but to enter on TN until it expires (given your premise that H1 will be requested to coincide with TN expiry).