I've been using henna for the past year. Yes it is absolutely all natural, so long as you buy the right stuff. Do your research, study study and you will find all the answers you need. I buy henna made for 'mehandi' (body art) from the Indian grocery store for only $10 per kilo, which does 4 or 5 applications. The quality is fantastic.
My hair is now growing in totally straight. This may have a lot to do with my current hormone stuff-- menopause. (I never had curly hair until I went through puberty, so this makes sense) I've hennaed over henna for the most part, occasionally I will just do the roots, so the curls I have left have been hennaed many times. (once a month for the past year). My curls are growing out, and they are relaxed from a 3b/c to a 2b/c. So YES, It has relaxed my curl.
I think the relaxing effect really has a lot to do with your own personal texture. If your hair is fine and naturally porous, like mine was, (it now looks medium), it will relax more. I think coarser hair will not be as easily straightened with the henna. It would make sense that the more porous, the more henna is binding into the keratin, thereby filling your hair so much that it can straighten the curls, and because it is finer, it is easier to bend.
It sure is weird having straight hair. I miss my curls- it's been quite a transition, but I am enjoying my new straight hair too.. and it is SO LONG.. and henna makes it SO SHINY! I get a ton of compliments, which kind of is embarrassing after a while, lol.
But heck, that's okay.