Is it illegal for an employer to hire an illegal?
Yes, that part was left alone - employers face fines and closure for employing illegals. Basically the judge said that they can look for work, but you can't hire them BUT you can deduct their wages from your taxes if you do hire them. In other words, complete and utter contradiction.
And to clear up a question up thread -
The ruling did not SHOOT DOWN any part of the law. What ths ruling does is lift the STAY on the main parts of the law, allowing them to go into effect immediately, and blocked other parts from going into effect until after a full trial.