People can't see how this creates bias during a trial? Do they also refer to speeders as 'illegals' (since they are also breaking the law). Do they wait to be sure they have been convicted of living in America illegally before calling them illegals? Would you be upset if a guy who was accused of murder (but not convicted) was referred to as a murderer during a completely separate trial? Isn't that EXACTLY what you are all advocating?
Unless the fact that they are living in America illegally has a bearing on the guilt or innocence of the person (such as in the murder of an immigration officer), then they shouldn't be calling them that. Would you also be fine if the prosecution continually referred to a person as Gay in a trial, just to get the bigots on their side? I don't see how a lawyer should need to use the term in most cases, and if they are using it they are intentionally playing on people's feelings towards immigration, as opposed to their opinion of guilt or innocence. That is exactly what a good judge is supposed to stop from happening.
I certainly think this is PC, but this is one area where PC was originally designed for. It's not like he's advocating calling them a 'differently statused citizen', just call them a foreign national instead of an 'illegal'. Also, if they were even convicted of being in the US illegally, shouldn't they have been deported?