It's possible.
The flip has no manual controls for white balance, shutter or iris. These are key components to controlling how a camera records an image and the Flip won't provide them for you.
But with enough careful preparation and lighting of your scenes you can get good images.
The Flip is almost weightless, too, so handheld shots are extremely jerky and hard to control. You'll probably want to use a tripod or some other stabilizing device.
The microphone on the Flip is terrible for capturing decent sound, so you'll want to consider an external audio recorder (unless your films are going to be silent or with no dialog).