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No. 'Free' apps means that they're free. You don't have to pay anything for free apps. Sometimes few websites do market some of there apps as free applications, but actually they are charging for them through iTunes.Apple.com
There are no legitimate sites or apps that give you DragonVale gems, besides the actual official DragonVale game app.
Some are and some aren't. You should usually look in the free section when looking for apps in the app store. There is also a free app on the IStore That is called "freeappaday" it is great and gives you apps that you like based on what you have downloaded, most apps will be free for a few days and this is a great way to get the latest and hottest apps for Free!
you cant download app which cost for free if you download it it will cost you and you will have to pay for it, if you dont want to pay for apps only download apps which are free.
Some apps on the itunes app store are free. just click install and it installs the app for free. There is a whole category showing you all free apps that are in the store.