Is it actually illegal to have your tires extending out past the body of your truck?  I have seen many trucks that have them sticking out but why do they not get pulled over?  

It depends on where you live...I dont think 1" or 2 wont hurt but anything wider might need flares to cover them.
But then again if your not too shy around cops then stop one and ask.And If your in California Id ask him from a car so he dont pick your rig apart and give you a ticket!  

it depends on state statutes and municipal ordinances in your area... around here i believe it is no more then 1/3 of the tire can extend beyond the fender/flare... and they more then likely won't stop and measure... but if half your tire is sticking out then you may get pulled over...