I think it's better to submit to just some of the main search engines and then see where competitors are linking listing their sites in other directories. It's like bulk mail most people throw it away andyour message doesn't come across which is why people use targeted advertising.
I agree any service that submits to 1000's of so called search engines will probably have more of a negative affect on your site becuase most of these link lists are probably low quality and spamy which only hurts your site look for quality links only need a few real high quality links and only need to be listed in a few directories and search engines and all that can be done by hand and with a little optimization