I edit an online portfolio site for photographers and illustrators.
http://www.ukportfolios.com/ It is a UK based site, but I am getting
artists from all over the world sign up to create their portfolios,
but also wanting to sell their work in our online library.
Can amateur and professional photographers from the US sell their
photos as royalty free images online? If they own the copyright do
they have the right to sell that image? Does it depend what is in the
image- people, places, etc?

Editor

Under US copyright law, the photographer, the one who opens the
shutter and exposes the film, is the owner of the copyright in the
photo.  The owner of the copyright is free to set whatever terms he or
she wishes in terms of transfer or use of the copyright in that image.
Your question, however, contemplates related intellectual property
constructs, like right of publicity and trademark law.  For example,
if the photo contained an image of Posh and Becks, although the
photographer may own the copyright and can lawfully post the image,
sell it, license it, whatever, under ~copyright~ law, Posh and Becks
may object under laws arising under the right of publicity doctrine.

So the answer to your primary question is yes, if the photographer
owns the copyright, they can indeed sell royalty-free copies online. 
If you are going to permit such postings, you should probably cause
posters to agree to an online form that makes them affirm that they
are the lawful owner of the copyright in the image(s) and that they
will indemnify you against claims of copyright infringement.