Today I came across a site that says submit your site to 3000 directories automatically and the service was free also , should I do it, will it have any negative impact on SE's?
The overwhelming opinion here (there are many threads debating this) is that auto-submitting to directories is bad, but it is only bad with regard to the directories themselves, ie., directories don't like them. If you fit neatly into the category you choose, they shouldn't even know. The SE will notice that you have lots of directory links and may discount some of them, but you ought not be penalized for this; sites have all kinds of IB links and filtering them is possible, but penalizing sites for being in directories would cause all kinds of headaches. If you have many sites to promote, bear in mind that some directories may blacklist you from future, manual submissions for using this tool. I used an online submitter, and received many rejections, partly because the directories were not targeted, required reciprocal or payment, or my submission had left tell-tale signs of automation. Which tool are you considering...there are debates on the relative merits of these programs throughout the forum.
Surely, if you are targeting any ranking with that website. Then you should go for manual directory submission, the reason being that you will have that job done by a human who will have option to select right category where you will find websites similar to your's website. Hence, Google gives more weightage to those listings, since the surrounding links do matter in a directory. Those, who dont want to miss those unique links from unique directories (which are lost in auto submissions most of the time) will always prefer manual work. But yes, auto submissions is good for automated websites or websites which needs the start-ups in there ranking on Google. Each links counts that way. I would rather go for getting links from social bookmarking and article directory websites since, they are mostly authority sites, and are having more weightage if looking in serps result.