Is it possible to install the probe rack so that the direction of probe insertion is in the X Axis? 

On our machine it was set up on the side of the table so that the direction of insertion is in the Y Axis and reading the Renishaw installation instructions, they only refer to that orientation, although they give all the parameters to calculate the docking positions coordinates.  The installation in CCM Manager seems to be a "canned cycle" so you don't have to enter any parameters.