What constitutes "illegal"?
That question has been answered in this and other threads pretty comprehensively. Many organizations and individuals with a personal or financial interest in selling, installing, or using illegal equipment like to prefer their own creative and non-facts-based ideas of what "illegal" means.
there are two standards; Federal and state.
Quite true.
the Federal Gov't believes its standards supersede all state standards. Many states, however, believe that is not the case and the individual states set their own standards which conflict with the Federal ones. This has gone on for decades
Nope, but that misunderstanding is where a lot of those self-serving imaginative ideas of what "illegal" means take root.
The principle of federal preemption is very simple: in the case of any vehicle component, system, or design feature that is Federally regulated, any provision of any state standard is null and void to whatever extent it differs from the applicable provisions of the applicable federal standard. That is not a matter of "belief" on the part of the Federal Government, it is a matter of black-and-white, unambiguous Federal law, to wit: Under 15 U.S.C. 1392(d), "Whenever a Federal Motor Vehicle Safety Standard (…) is in effect, no state or political subdivision of a state shall have any authority either to establish or to continue in effect with respect to any motor vehicle or item of motor vehicle equipment any safety standard applicable to the same aspect of performance of such vehicle or item of equipment which is not identical to the Federal standard."
The legal machinations are not over whether this is or isn't law -- it is. The machinations are over enforcement. When Oregon and Washington and a few other states (Alaska, perhaps, I'd need to refresh my recall) altered their vehicle lighting codes in the mid-1970s to permit the use of ECE headlamps as an alternative to the US headlamps required by Federal Motor Vehicle Safety Standard 108, there was indeed a pitched war of words between those states' legislatures and NHTSA. The debate wasn't centered around any question, notion, or doubt about the presence, meaning, or legitimacy of the federal preemption provisions of the National Traffic and Motor Vehicle Safety Act of 1966 as cited above. The states changed their statutes, the Feds advised the states that importation, distribution, sale (and installation by regulated parties) of vehicle equipment noncompliant with the Federal standards remained a Federal crime subject to civil penalties and Customs seizure, etc., regardless of what the states put in their codes. The states said "We're not going to enforce that." The Feds said "You don't have to; we'll be watching the ports." And they did. Many containerloads of noncompliant headlamps were seized and destroyed by US Customs. Some got through; such is the nature of life. Motorists in Oregon, Washington, and Alaska didn't have much difficulty getting hold of ECE headlamps if they wanted them, and even though Oregon changed their code to align fully with FMVSS 108 some years ago (deleting the provisions permitting ECE headlamps), Oregon motorists still don't have difficulty getting ECE headlamps and still don't get tickets for them. The state chooses not to enforce.
The same is true today with "HID kits". They're Federally illegal in multiple different ways. US Customs seizes and destroys many containerloads of them. Plenty still get through. That does not mean "Olly olly oxen free!" legality by simply having sneaked through Customs. Most states' vehicle codes don't contain language against them, and in those states whose codes do prohibit them most users get away with them because the state chooses not to enforce. Does that make them legal? No, it does not, any more than getting away with robbing a bank or running a red light makes either of those things legal, any more than getting a warning rather than a ticket for going 74 in a 65 zone means it was legal.
some states allow "pulsed" brake lights
One state has a line in a very strange place in their vehicle code, that says the CHMSL may flash. The phrasing makes it obvious that it was put there at the behest of one specific vendor of CHMSL flashers, located in that state. Another state has a similarly bizarrely placed line specifying that one particular brand of blue headlight bulb is legal -- and what do you know, the maker has its headquarters in that very state! Both of these provisions (and many others like them) are null and void by dint of Federal preemption, and these two examples are a good, clear illustration of why it's best that the Federal regulations, whatever their shortcomings (and there are plenty) trump these kinds of state-level shenanigans.
others go along with Federal guidelines that apparently prohibit such operation.
There is no such thing as Federal "guidelines" on automotive lighting. Regulations are regulations. They are rules, not suggestions or "guidelines". Compliance is mandatory, not suggested or preferred or optional.
