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As you might guess, I'm no fan of the idea of state sovereignty. That said, the concept does serve the useful function of raising obstacles to one state (albeit one less oppressive in some regards) intervening in the affairs of another state (albeit one more oppressive in those regards).
Regarding the trial of Saddam Hussein and his henchmen, it isn't that U.S. intervention removed the Baathist regime and so _allowed_ an Iraqi administration to come into existence. The entire process by which the current administration came to power was fashioned by the U.S. government with a (very little) help from their British friends. And that administration depends for its continued existence on the presence of American and (a few) British troops for any (of the decidedly limited) authority it wields.
How so? The trial is being run neither by the Brits nor by the US. It's not just an Iraqi hangman, it's an Iraqi judge, Iraqi lawyers, etc. operating under Iraqi administration. It's true that US intervention to remove the Baathist regime allowed the current administration to come into existence, but it's hardly analogous to Colonial India ca. 1920s. As to "sovereignty" per se, I had some words on that in an early L&P guest-blogging appearance here: http://hnn.us/blogs/entries/5896.html and have more to say about it here.
Strictly speaking, an Iraqi hangman will hang Saddam. That said, given the U.S. and British presence in Iraq, the U.S. and British governments are correctly seen as overriding Iraqi sovereignty.
Neither Bush nor Blair will hang Saddam. An Iraqi court will.