Yes, VFD's can be fed with single phase and output 3 phase. Most VFD manufacturers use a derating system to maximize the output current available. Heat is the enemy of a VFD, and proper derating on single phase operated units should be considered.
You will find that most VFD's under 5 Hp have no derate. And VfD's over 5 Hp need to be derated. For example if you have a 7.5 hp three phase motor, you will most likely need a 10 Hp VFD. This is true with most all VFD manufacturers, but not all. So find out. You can look in any motor and drive catalog and it will give you the information you need for single phase operation. Some require only the two CCC's on any off the three input terminals, and some require a jumper to the empty terminal.
Another thing to consider is the motor itself. Is it rated for PWM operation? Is the magnet wire sufficient for VFD application? Internal magnet wire rated above 1600 volts.
Many times people will put a VFD on a motor to find that the motor fails prematurely. This is very common.
All new motors with the exception of single phase incorporate this special magnet wire in production. If your motor is more than five years old it may not have this wire in it. If it is less than five years old it probably has it already. For great prices on VFD's check
www.automationdirect.comFor information on VFD's take a look at:
www.baldor.comwww.tecowestinghouse.comwww.wegelectric.com 
