<p>I heard Microsoft allows use of commercially available Office UI controls, with the exception of competing products, such as a word processor or spreadsheet app, etc.</p>

<p>How true is that?</p>

<p>Also, if it is not true, do you know of any <em>free</em> Ribbon controls?</p>

You should look at
Jensen Harris' blog entry about licensing the Office user interface
which explains it in great detail. However I believe the relevant point here is:
There's only one limitation: if you
  are building a program which directly
  competes with Word, Excel, PowerPoint,
  Outlook, or Access (the Microsoft
  applications with the new UI), you
  can't obtain the royalty-free license.