As a senior undergrad in the comm group at UIUC, I will say that the DSP/Comm group at UIUC has a nice balance of "old and new". Within the comm group, you have information theory legends like Richard Blahut and Bruce Hajek and then you have relatively new profs who have made a name for themselves in the wireless fields such as Visawanwath, Veervaali, Vaidya and Srikant. There are also professors like Coleman and Milenkovic who are applying information theory to biology. You also have Prof. Shanhbag, who is a major player in designing IC chips for DSP and comm applications.
Also consider Andrew Singer and Doug Jones, both of whom are well known for their work in DSP and comm. If you're leaning towards pure DSP, there are guys like Yoram Bresler, who is famous for his work on sparse sampling, and Pierre Moulin.
There also seem to be A TON of comm/dsp grad courses. One defining aspect of the curriculum here is that there is a semester long course dedicated to random processes (ECE 534). I think UIUC, more than any other school, stresses fundamentals.
Generally, the 'systems' group at UIUC seems to be highly regarded in both industry and academia. Grad students in those groups here seem to like their work for the most part. In my biased opinion, of course you should come here .