Even if you are not in a big CL city, many replies to job ads are from overseas or from developers with limited communication. If you can communicate well and provide a solution for exactly what the customer is asking, you can win some good (and potentially long term) work.
But as Ryan says above, you need to weed through a lot of bad listings and be persistent in your search.
I've only recently started hunting for gigs via CL. I've picked 3 and responded (I took time to write what I thought was a good, carefully-worded response) within 24 hours or so but no one's responded back. I know sales is all about volume, I'm just trying to get an idea of what to expect.
Once you get the initial response, there's still a pretty good chance of the gig falling through for whatever reason. Contracting is rough this way, really no matter where you get your clients.
- Craigslist (specifically SF & Seattle) - Authentic Jobs - 37signals
Other places I've found stuff include Dice.com, 37signals Gigs Board, Freelance Switch, and AuthenticJobs.
I get a lot of recruiters for contract jobs contacting me through Dice, my resume post on CL, and my blog. That might not be the kind of thing you're looking for, but it doesn't hurt.