Hi!
Freelancing is not really a job. It's more of a lifestyle.
Deciding to be a freelancer is not a shortcut to good income and freedom.
It's going to be a long, heavy road before you even can taste the cake.
That said I don't want to scare you. Just be aware of the reality.
I've had my freelancing business since 2006 and I still feel that I'm far far away to perfect my business. I think I'm fairly good in my work, my customers are happy, but I've not yet find the golden road that gives me what I want 100%.
People pursue different things when they start freelancing. Yours might differ from mine, but basically I just want a moderately good income doing what I like, while still maintaining a lot of freedom and time to do other things I enjoy in life. To break away from the 9 to 5 cycle.
Web_God already gave you a good answer to your questions. So I'm not going to repeat all that. Just few tips.
1. If you are new in the field, start with your portfolio. Maybe consider doing some free work for some local business that you might think could benefit you later also (aka land paid work for you later). Or make some work for imaginary companies. I suggest the first one tho as you get experience for working with real clients. If you already have a good portfolio of your work from your previous job or such, then skip this step.
2. Make a basic contract (fill or extend accordingly with each client). Include payment schedule. 30% - 50% in advance for example. Stick to the contract and schedule yourself also. Don't be late with your work. If you can, put the due date as far as you can and deliver early.
3. I suggest charging by per project, not by the hour. Then all the extra stuff that is not included in your contract you charge by the hour. That's what I do.
4. Try to socialise, preferably face-to-face, and find a couple of talented guys. Then you can ask them to do some work that is not in your capabilities and are part of the project or ask them to do some work if your hands are full. This is expecially good when you have a good client that gives you work regularly. Then you don't want to say no, and risk losing that client. If you are busy and can't take the work yourself, you can ask help from your friends.
There is SO much more that I could go into, but unfortunately I need to work too..

FreelancerSwitch is a helpful source for more information. Try looking at their site.
Hopefully this helps a bit to get you in the right direction. And welcome to the ever growing brotherhood of freelancers..
