San Francisco Chronicle --
a three-judge panel of the ninth US circuit Court of Appeals indicated its willingness to reinstate parts of Arizona's SB-1070.
"The court indicated that it would authorize police to demand papers from those they reasonably suspect of being in the country illegally, however, would not allow authorities to arrest and prosecute them under state law.... however those suspects would be referred to the US authorities for deportation"
the panel agreed with Judge Bolton's argument in supporting the injunction on Arizona's SB 1070 that a state law against illegal immigration would conflict with federal authority, however they saw no conflict in requiring police to seek documentation from suspected illegal aliens.
In short, if reinstated, Arizona police would be limited to ordering a suspect to produce a driver's license or other documentation, including inquiries to immigration officials.
while it apparently looks as if the law (SB 1070) might be reinstated in some form, I am quite certain that the federal government and President Obama will object 100% to anything that would detour the colonization of the United States by the "new Americans."