All the Greats did it!! Bach, Handel, Mozart, and the list goes on and on... And how awesome would it be to show up and start jamming with people without looking at music sheets or whatever?
Here's a great blog post on great improvisers: http://ericbarnhill.wordpress.com/facts-about-improvisation/
In my opinion, it's the purest form of creating and sharing music! I honestly can't improvise... I think I'm still too much of a newb (I need to know my scales better and have some more music theory under my belt perhaps?), but it is on my To-Do List!!! ;). ...ugh... soooo many ideas and music to play with the cello... so little time!! noooo!!!
Below are some well-known improvising cellists (in no particular order):
And of course, Mark O'Conner, who is a violinist, but is leading the way for a new teaching method (O'Conner Method) that includes learning how to improvise on stringed instruments. If you don't know his name - you should! :). I would not be surprised if his method becomes as popular as the Suzuki method or replaces it entirely! Seriously.