I want to write this post a little differently.  I believe one of the reason that Republicans (notice I did not say conservatives) disagree on immigration is because we are working from two different set of premises on immigration, what is wrong with it, what is fair to illegals, etc.  So, I want to simply list out a set principles that should guide any legislation that is passed.  If you disagree with any of these principles then it becomes more obvious why you disagree on what legislation should pass.
1. An unguarded border is a threat to national security:  If millions of mexicans can cross it, so can highly trained al-qaeda operatives.  Fencing, virtual and real, should be built and enough border agents should be hired to completely defend the border.
2. Large numbers of unassimilated foreigners pose a threat to national identity.
3.  Amnesty encourages law breaking and will lead to a wave of new illegal aliens.
4. The phrase "undocumented worker" is a pathetic title; the problem is not that they are undocumented, but that they broke the law in coming here, working, driving, etc.  
5.  Amnesty can be defined as failing to sufficiently punish a crime.  A simple way to test if someone has been given amnesty is whether or not they regret their crime.  If illegals do not regret their decision to break our laws to come to the US, then they have been given amnesty.  Under this definition the Democratic "shamnesty" bill in the Senate is obviously amnesty because the only punishment is a meager fine.  Paying back taxes, background checks, and learning english is not a punishment; it is what is expected.
6.  No guest worker program is desireable if it is not temporary.  If anchor babies and paths to citizenship are not eliminated, a guest worker program is undesirable.  Guest workers should also receive no government services.  The last thing we need is more poor workers sucking the welfare system dry.  The guest worker program should only allow as many workers to come as are needed; no artificial quotas.  In an ideal guest worker program, workers come, work for a few years, save some money to pull themselves out of poverty, and then go home.
7.  The process of legal immigration should be streamlined and the number should be increased(not dramatically though).  This reduces strain on our borders.  Besides, America has always asked for the world's tired, poor and hungry...we just want them legally.
8.  If there are no jobs for illegals, they will go home.  The idea that we have to deport 12 million illegals is bogus.  If they cannot find a job anywhere they will go home.  The ones who have been here for a long time are rich enough to move, and the ones who have not been here long do not have deep roots to pull up.                                                                                                               
9.  It does not matter if it is a "burden" or anything else for these illegals to leave.  Maybe they should have thought about that before they broke the law to come into our country.  Anything less is amnesty.
10.  Any illegal stopped for traffic violations, etc. from now on should be deported without fail.  Period.  No questions asked.  Law enforcement should be given the resources to determine whether they are illegal, immigration officials should be given the resources to deport a larger number.  Foreigners thinking about breaking the law and entering our country will know that if they ever encounter law enforcement they will be deported.

I may update with a few more points, but as you can see a slightly toughened Pence-Hutchinson bill would be acceptable to me.  I do not want compromise for the sake of compromise though, the Democrat's senate bill is a worthless piece of trash and should be completely discarded.  Basically, the conference committee needs to move forward with the toughest bill that 51 republican senators will vote for or possibly the toughest bill that will not get filibustered.  Forget the Democrats; they have their future hispanic votes in mind, not the good of the country.  

UPDATE: 11.  Illegal aliens can never be given the right to vote.  How can we let someone make the laws who did not respect them in the first place?  If some sort of permanent residency is given to illegals, I can live with that (if it meets my amnesty rules, which would be hard), but no citizenship.                         

I have always had a strong belief that the easiest way to ensure a conservative majority in America is first through the family and secondly through political activism.  In other words, no matter how many rallies you attend, blogs you write, or donations you make to support the conservative agenda, raising a solid family is a much greater contribution.  Bringing up 3+ kids to know the Lord, fear the government, work hard, and love freedom is one of the greatest contributions to society that one can make.  I come from a family of six kids.  My parents took to heart Psalms 127:4,5 twenty years ago, "Like arrows in the hand of a warrior, so are the children of one's youth. How blessed is the man whose quiver is full of them; They will not be ashamed when they speak with their enemies in the gate."  Let me just say, if my Dad gets in an archery contest with most people, he will win :)
    The willingness of conservatives to have large families instead of fancy cars is having a large impact on the electoral map.  The American Conservative has an article that talks about birthrate and the electoral map here.  One of the major points of the article is that you can practically predict how a state will vote by its white birthrate.  States above a 1.8 fertility rate for white women voted for Bush with only 4 exceptions, those below voted for Kerry with only 2 exceptions.  The trend would have been even more pronounced if you had focused on red vs. blue counties.  Basically, liberals aren't having (or are aborting...there is another article about that) babies.  To make matters bleaker for liberals, birthrates compound.  And the final blow, I don't have any statistics for this, but I am guessing that the farther to the right someone is the more kids they have.  Not a pretty picture for liberals...oh, sorry "progressives."
    Of course birthrate only makes a difference because children overwhelmingly have the same partisan leanings as their parents.  So, one of the major efforts we as conservatives need to be making is to train our children.  Teach them principles, give them facts, train them to think, combat the trash they learn at government schools (or even better pull them out of those worthless places), let em' listen to Rush Limbaugh, and most importantly...start young.  Good luck, now go have another kid :)