I did that once. They are extremely picky about what they take. They picked out one box full (out of about 4 boxes) and handed me about $25. I didn't even get the chance to see what they picked or agree/disagree with how much they gave me. I won't do that again.
I used to always put them on eBay and they sold really well, probably made about $1000 in a year of selling all of our infant/toddler clothes. I haven't been having as much luck on eBay with the older kids clothes, and the fees are so much now that I've pretty much given up on eBay all together. I also tried Craig's List once. I got about 14 replies of people who were interested and only one person followed through and came over, bought 2 items. I had about 100 pieces to sell. I tried a rummage sale this summer and that was the most successful, but a LOT of work. At this point I'm about ready to give it all away. I still have boxes & boxes in the basement. Maybe if you got together with some other moms with lots of clothes to sell, you could advertise as a 'kids clothes only' rummage and that would probably go pretty well. I also think it makes a huge difference to have the clothes on hangers rather than in a pile or box.