Absolutely! I have 35 sites on one multisite installation, and about ten more individual sites -- some WordPress, some not -- all on my local machine. At any given time, you can add or remove sites with ease.
You need two things:
- create Virtual Directories in your Apache configuration file
- add or remove entries in your Windows hosts file
Your virtual directories can point to any folder on your system (in general) so each folder can act like a new/different server. Give each virtual directory a servername/alias and then add that name/alias to your hosts file. If this is Greek to you, simply Google virtual hosts and windows hosts file to learn how to do it.
Side note: You don't have to call them all "localhost". You can name them however you want, even using the live URL. For example, if I'm building http://www.xyzsite.com, I create a folder in my "Sites" folder (located in My Documents, though I'm on a Mac). Then, I create a virtual host to point to that folder, with an alias of http://www.xyzsite.com. Finally, I update my hosts file to point http://www.xyzsite.com to my local IP address. When I open http://www.xyzsite.com in my browser, it loads up the site/files on my local machine.
When I'm ready to go live, I simply upload the files and database and it's live -- no messing with search and replace, changing URLs in the database or content, etc.