I don't think it's so much about "legal vs illegal" as a technicality as it is another skirmish in the ongoing struggle between (over)zealous law enforcement and personal privacy. The supreme court held in 1914 that, in order to deter police overzealousness, evidence seized in violation of the fourth amendment without a warrant must be excluded from use in federal courts. The rule was applied to state court prosecutions in 1961. Law enforcement and prosecutors and conservative legal analysts have hated the rule ever since, and have argued that exclusion of the illegally seized evidence isn't a proper remedy. Personal privacy lost this round.
Today's decision is, in essence, a determination by the new majority that this kind of illegality -- and there was no question that the police acted illegally in failing to knock and announce before entering -- does not need to be deterred: so long as there's a warrant, everything's o.k. Scalia's suggestion that filing civil lawsuits against cops is likely to deter them from anything is somewhere between appallingly cynical and downright ludicrous: it simply doesn't happen. Civil rights cases are expensive to pursue, and, given the prevailing social climate, difficult to win (and lots of good and committed lawyers out there simply won't do these kinds of cases any more, or at least not very often, for just those reasons). And in those rare cases that are won, only in the most extreme cases of egregious misconduct do the cops themselves ever receive any sanction. Not much of a deterrent. In short, one more right, backhandedly acknowledged, with no real remedy for its violation. I think all of the things in John's bucket of worms are likely to be the unfortunate results.
If there's any comfort in the decision, it's Scalia's acknowledgment that evidence illegally seized without a warrant is still subject to exclusion. "Until a valid warrant has issued, citizens are entitled to shield 'their persons, houses, papers, and effects,' U. S. Const., Amdt. 4, from the government's scrutiny. Exclusion of the evidence obtained by a warrantless search vindicates that entitlement." I guess that's something, coming from Scalia.