They are most likely to be illegally ripped copies of either the laserdisc versions or, worse still VHS or, worse still, videocamera copies from the cinema - all of which I have seen in one guise or another. (Watched a malayan version of a Disney movie once and really felt like I was at the cinema - mainly cos I could see the backs of the heads of the 2 rows in front of mine at the bottom of the screen!)
Yes they are illegal and infringe or completely disregard copyright laws worldwide. They often come under the badge of DVD Silvers. Unfortunately, very often you wouldn't know what you are buying (quality wise) and the picture and sound is often much poorer than a genuine release.
Lucasfilm suggests there will be no release in America for at least another 6-9 months and these will be staggered if at all. UK release of all 4 current movies, if at all, will be several years down the line - by which time DVD in its current guise will be superceded by a HD version.