Yes, it's possible. You gotta be really lucky or really good AND work hard to make a lot at it, but the nice thing is that once you upload something you might continue to make money on the image for years to come-- though income tappers off. You usually don't make a lot per download, but a popular image can sell dozens or hundreds (if you are lucky) of times a month.
I've been doing microstock on the side for 4 years now. It took about 3 years to make enough to pay for my iMac.
There are a ton of stock photo sites. Most of them aren't worth your trouble. Many sites once they start to get viable on their own get bought up by bigger sites. I'd look into dreamstime and shutterstock first. (full disclosure: these are referral links-- but i'm only linking to the good sites.) They have some of the best returns. iStock has better returns but they are much pickier about what they accept, and in about every way harder to deal with. Try Dreamstime first, and once you are comfortable with that try shutterstock, or iStock.
* If you do vectors, you tend to get paid a lot more per download.
* For raster images the higher resolution the better.
* Good keywords are very important
You need to be thick-skinned about things. Reviewers will reject images for nonsensical or incomprehensible reasons. Images that you are really proud of won't sell. Your most popular image will probably be one you least expect.
TalkMicro is the best forum i've found for finding out about microstock