Every time I tell someone I quit my job to become a freelance writer, I get asked the same questions. I'll discuss each of them, one at a time.
1. What do you write?
There are a variety of ways a freelance writer can get paid. You can make easy, steady money writing for article warehouses like Associated Content or Demand Studios. There are also a variety of revenue share sites like Suite 101, Triond, paid blogging sites, etc. These do not pay a lot of money, but there are people who make a living just writing for them.
A more professional and lucrative way to make money freelancing is writing articles for print or web and writing web content. There are many different tasks that fall loosely within these categories. Press releases, letters, sales material, translation, transcription, rewriting articles...you name it. If you can string words together with good grammar in a way that makes people want to read what you wrote, you can make money doing it. If you decide you want to be a freelance writer, it's your choice what you want to do!
I do a combination of the above. I do magazine articles, online articles, website content and article warehouses.