FOSS

I'm trying to create a java based plugin for an IDE (non eclipse), for which I need PDF generation. I started using iText, but I read somewhere that I cannot bundle this as part of my plug-in for distribution. I'm finding it hard to comprehend license agreements.
Are iText Java libraries to generate PDF documents free, or do we have to pay for them?
Can iText 2.1.7 (MPL/GPL) licence be used in commercial projects? I am not a legal guy but lots of discussion threads suggest that there is no issue using the earlier version (2.1.7) of iText in commercial projects as that version is bounded with terms & conditions governed by MPL /GPL license.