Due to only a single drop of dialogue in Oblivion about Hlaalu and Dres 'picking apart the carcass of Indoril' do we get the assumption that Indoril is dying. My colleagues are making the logical leap that that would apply also to Ordinators, however, I'd say that those that were already Ordinators and dedicated to the Temple in that way would not commit suicide over inter-house politics.
Remember, that the Ordinators are designed first as the will of Almalexia, second to protect the Temple, and third to provide a means of third-party justice towards petty inter-House squabbles so that the small things do not escalate into House warfare.
"-If so, would there still be illegal slave trade going on?"
Slave trading? probably only among the more provincial of Dres and Telvanni holdings. Slave keeping? Probably widespread, but again more in Telvanni's and Dres' holdings than anywhere else.
"-Finally, would Ordinators ever be involved in something illegal?"
Ordinators are just people, like everyone else. While they all seem to take themselves way too seriously, not all of them would be above bending the law for their benefit. But remember that like any corrupt authority figure, they would not risk their position or power, they would use their power to ensure that you did not endanger them.
I feel inclined to agree with Mehrunes Dagon on this matter, although it is suggested that House Indoril is not doing very well (other than the part about Hlaalu and Dres picking apart the carcass of Indoril, there's also the part where it's said that "Indoril is in ruins".) this does not mean that all Ordinators would commit suicide due to the fall of Idoril, I'm sure that there are many of them who would not let house politics become a reason to end their lives.
And yes, Ordinators certainly aren't beyond doing illegal things, I doubt many of them would openly engage in the slave trade, once it has been made illegal, in the interest of maintaining public image and their position, and even in the time of Morrowind, we saw few signs of the temple keeping slaves, mostly it seemed to be Great House nobles who employed slave labor, but, like any law enforcement organization, there are still those among them who would break the same laws they enforce if they can benefit from it, and bend those laws enough to avoid trouble or cover it up.