Google Panda is all about sorting results based on quality and relevancy. You can keep submitting to quality directories.
I did an experiment on a site where the only link building I did was with web directories. It has continued to rise in the SERPs even after Panda. As others have mentioned Panda went after sites that it believed had poor content. Here's the link to my experiment if you're interested: http://forums.digitalpoint.com/showthread.php?t=2172178
Not so good after Panda. Panda affects those sites badly that had a quantity of links rather than having quality links so if your links are coming from sites like the custom directory submission sites then it is not so good but if your links are coming from sites that are relevant and have a high PR even though they are few in number, will have a more positive affect.
Directory Submissions are still hailed by SEO experts the world over and are a quick and easy way to build quality backlinks to your website. No matter whatever updates come in, directory submissions are here to stay.
Panda update has no link with directory submission. But you should submit your site to as many web directories as you can.