Some concessions were made allowing states to issue "driving certificates" that do not meet the national requirements, but they would not be valid for official purposes.
Sounds like a grey area without much difference. Kind of like the debate over civil ceremonies and marriage. All this will do is strengthen the authority of these "driving certificates" proving one step closer to handing out a license to an illegal.
The rest doesn't impress, but As licenses were meant to be the primary issue I see no cause for celebration.
If Congress had mandated that the States not give driving privileges to illegals they would have been stepping all over the Constitution because since it is not mentioned in the Constitution, this is clearly one of those rights reserved for the States. Instead, Congress has said that if you give licenses to illegals we will not accept drivers licenses from any of your citizens as Federal ID for the purposes of entering Federal Buildings or boarding aircraft (interstate commerce). They have struck a nice balance with states still having the power to do as they please, but with consequences.
There is a huge difference between allowing an illegal to drive and buy insurance with a drivers certificate that is clearly marked "not valid for identification" and giving him a drivers license which is the defacto national id and which makes him nearly indistinguishable from real citizens including making it very easy to vote.
My preference would be to deport them, but this is at least a step in the right direction. And Sensenbrenner meant it primarily as a National Security measure. Recall that several of the 9/11 Terrorists used drivers licenses to board jets.