First: yes. You’re absolutely unlimited in what you do with your install of WordPress on your own server. No issues there. Use it. Tweak it. Install Themes and Plugins. Break it. It’s yours. 🙂
Now, having said that: wordpress.com is a commercial service, owned by Automattic. They are under no legal or moral obligation whatsoever to make any of their Plugins or Themes available to anyone else. (Just as you are not obligated to make available any Themes or Plugins that you develop or use.)
Fortunately, Automattic does make a great many of their Themes and Plugins available. You just have to know where to look. For example, you can get all of the free Themes hosted at wordpress.com directly from Automattic’s SVN repository:
https://wpcom-themes.svn.automattic.com/
Thank you for help! great answer. happy girl here 🙂
Chip, this is a good start. But I’m a pretty new user to WordPress. Picking up on your info above, how do I get the theme from Automattic’s SVN repository to my wordpress.org (on GoDaddy) blog?