Is it possible to draw graphs like in image below in LaTeX? It doesn't have to look exactly the same. I need arrows with numbers and circles (or dots or other symbol) with text in it (or next to it).

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Here's an example, showing how you could do it with TikZ in a short and readable way.
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I also suggest the amazing Just for completeness sake, I'd like to add an answer with one the first packages I used for drawing graphs and automata before I found This package relies on
The output:
There we go. |
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I combine tkz-graph and tikz. Picture
Code
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automatalibrary. For an example, see texample.net/tikz/examples/state-machine – Stefan Kottwitz♦ Feb 25 '12 at 11:12