Who is at fault if you back out of your driveway and hit a vehicle that is illegally parked and partially blocking your driveway exit?

You are. Unfortunately, it doesn't matter where the car was parked. Even if it was parked on the moon, you still hit it so... I know it doesn't seem fair but rules are rules. Well, the other driver could receive a ticket for illegally parking, but the car was unoccupied and you ran into it. That makes you responsible for the accident, particularly if you knew the car was there before you back out. Not suprisingly, that someone may have done something wrong does not mean everyone else gets to take a free shot at them. In fact, it may put more obligation on those later to lessen the effects of the wrong doers actions. So, the first one doing wrong may be less responsible than the last one, or anyone who could have avoided making it a problem.