i wont be graduating until may, 08 with my masters degree can i still apply for the 20,000 masters degree quota next april or do i have to wait until i graduate.

you may apply but u have to include a letter from the university stating that u will be graduating and later need to provide you transcripts and other related documents. many of my frens have done it they have got accepted so dont worry. good luck.

It depends upon college. Some college don't write you letter about that. So, you have to talk with international adviser about this issue and s/he will give you some advice. Some of my friends missed this year H1B quota because of the issue like you.
So, get more info whether your college will give you a letter stating you will be graduating in the May 08 for sure.