Commuted pension is definately tax free.
I commuted the max last year. As to whether it's worth it - do the sums based on investing the commuted element either in a deposit account, or better still paying off your mortgage (therefore tax free) and compare them to the extra pension you would get paid (less 40% tax) and you will find you are better off commuting at today's interest rates. But surprisingly, not that much.
Of course, if you snuff it before age 55, your widow is definately better off.