I have heard this too. Well, actually two separate things related to this.
1. That it was illegal for a Canadian person to drive a car that a US person has in Canada as a visitor. (Especially if if the US person is not in the car with the Canadian.) I heard the car can be confiscated on the spot if a Canadian is driving a US visitor's car and the US citizen is not there. I don't know if this is true, but it did concern us some after we heard about this.
Just to clarify....what I meant by that is that I was told that a Canadian is not supposed to drive a US car if it has been brought in temporarily (without importing it) by a visitor to Canada and has US plates. Apparently, temporarily imported things by visitors are not supposed to be used by Canadians:
http://www.cbsa.gc.ca/publications/pub/bsf5082-eng.html#s2I don't know how strict they are about that though, especially for US-Canadian couples dealing with immigration...
As far as how long one can drive on a US drivers license after landing, I think that probably varies by province. In Québec, for example, I think they allow six months to switch a US license to a Quebec one. It took me three months to get the paperwork together and have my appointment. (I had to re-schedule once, because of not getting the right paperwork in time from the US, and each time I called they had only 2 appointments still available for that next month for transferring a US license.) Other provinces could have much different timelines and procedures, as some have mentioned.