I know reading manga online is illegal but are there really any legal anime sites?

Hulu has some that are posted legally but the selection is limited. Most of the time it's illegal. Streaming isn't a good idea from most places anyway due to viruses and other male ware.

Look on youtube for clips of anime. Funimation (I think I am spelling this wrong) has actually put full length episodes of some of their shows on youtube, so it is legal since they hold the copyright.

There is now quite a bit of anime being legally streamed, but I'm not sure if you need a paid account for the websites or anything. Some are also region-locked so if you're not in the US, you're out of luck. You can check out Crunchyroll, Funimation, Anime News Network, and Nico Nico. Those are the ones I know of.