I don't believe Tradehill is exchanging BTC for USD for any customers.  The link above is likely someone speaking imprecisely.

Tradehill after consulting with lawyers made the determination that they were not compliant with CA regulations and that further trading could open them to criminal and civil prosecution.

Exchanging BTC for USD would be further violation of the regulations they have now openly admitted they aren't compliant with.  If they wanted to flip the bird at the law they could have simply remained open in defiant violation.  To accept the regulations and close (and thus admit they are aware of regulations and their non-compliance) and THEN execute trades to assist customers would be beyond asinine.