Generally, you are only allowed to use deadly force to respond to deadly force, as Paul has already written. Thus, when you catch someone stealing your car, get between the car and the escape route, and shout a warning if possible. If the car starts to move towards you, drill holes in the guy, since driving a car while in commission of an inherently dangerous felony has been conclusively held to be use of a deadly weapon, plus driving it towards you would be a specific intent crime of attempted murder. There are plenty, PLENTY of case law examples involving LEOs who have done this exact thing, and the fact that you in some way increased your peril by being in front of the car does not mitigate the fact that your life was in imminent danger.
However, you will also note that the homeowner is not being charged with any kind of wrongful shooting, only possession of a type of firearm banned by local ordinance (not even state law). Why was this a "good shoot"? Well, I have to go into common law here, because that's what on the bar exam. I don't know what the specific rules are in Illinois, after all I'm studying for the Missouri bar, but under common law burglary is considered to be one of the few specific-intent "violent felonies" considered inherently dangerous enough to warrent a deadly response. Rape and arson are two other examples which personally suprised me while studying this earlier today. If I catch a guy in the act of rape, and its unquestionably the right guy, I can blow his damn head off if he's still in commission of the act when I catch him under common law. Sometimes common law kicks ass, its the law of the land before all the liberal judges screwed it up and helped make us a nation of victims.
Sometimes studying for the bar exam is actually kinda cool.
EDIT: Oh yeah, and this homeowner will probably be able to plead out, if he's in violation of a local ordinance its probably an infraction, I bet the gun gets confiscated and he pays a hefty fine at worst. Next time if handguns are banned in your town, either move to a real American town and not some pussy communist town, or get a damn SAR-1 or a Remington 1100 to shoot at burglarizing assholes with. See how they like THAT!