The helpfile says they gain based on their natural stats if they are in form. Can I clarify if this means their unmodified natural stats or modified stats out of form? E.g. If my wis is at 24 as a gnome, but mod-ed to 25 via items, will I gain 6 pracs if I am in form? Thanks

A player will gain based on the better of their natural, and modified stats in the general sense.

The exception, as you mention, is for a shapeshifter in form. Then, you can consider their "modified" stats to be their form stats (given you've modified yourself to have huge strength, con, dex of the animal, but probably lesser int/wis).

For your example, no...the gnome will not get the benefit of wearing +wis items and gain the extra practice when he levels - if he's in form. If you level while unshifted, you will gain the extra practice.