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Yes it's legal.

Yes you can use giftcards for Itunes.

you pop on, search for a song, click download. And it will charge your card, I use a credit card but I assume they have some means of redeeming or charging your Itunes card.

 

Edit: looking at my Itunes, it says you don't need a credit card to redeem a gift card, you just have to enter your gift card's info. 



You can find me on facebook as Markus Van Rijn, if you friend me just mention you're from VGchartz and who you are here.