It seems that the most controversial part of his speech is the proposed temporary working permits.
Temporary working permits, or "blue cards," will be issued to temporary workers.
A person can become a temporary worker by:
1. Applying for the permit while living abroad and having a job offer from an American employer, or 2. Applying for the permit while living illegally in the US, paying a fine (fee), and having a current job.
The "blue card" will not give the immigrant automatic permanent residency or US citizenship.
Instead the "blue card" holder will have to apply for his "green card" [permanent resident card] using the current immigration laws.
There is also the requirement that it be a job that Americans are unwilling to take. What this means, however, is impossible to guage until we see what the legislation actually looks like. Does it mean at the same salary? What protections would there be that employers don't just use this program as a way to artificially drive down wages? And for those illegals who are currently holding jobs and want to become legit, does the employer have to try to replace them with an American first? All unknowns as of this speech.