I propose that to build a successful directory the first things we need to do is find our niche, build a comprehensive category structure, then populate that structure with quality (from searching) and promising (from submissions) links. What do you propose?
What do I suggest? I suggest you go back to the drawing board. A successful directory needs $, $$ and even more $$$ to maintain itself and become a success. Though I agree partially with your idea (adding quality sites from searching) - a directory needs money to be spent to gain any form of revenue in return. It also has to gain one thing to return to its customers. Traffic. And to gain traffic - it takes time (or quick-fix: money) - and time = money.
Getting people to use your directory will take time so be prepared for it to not just shoot off real fast.
and the ads revenue is the mistress, you staying with the queen, care for her needs but what you really want to do is humping the mistress...