Actually if you look at google's help. They say to submit your site to dmoz, yahoo dir and other directories ............ So I don't know if it is good or bad, but google does encourage it.
Good question, I think that some directories may be seen as a sort of link farm by SE's, and may have a slight adverse effect, but overall, submitting to ones that are not just there to be indexed but to provide a service is a good idea. Best practice could be just to submit manually to relevant ones.
I can tell you that by submitting to directories I have been able to: 1) Increase PageRank 2) Get sites better indexed 3) Rank higher for keywords It's true there are a lot of directories that don't end up getting very popular, but by submitting to enough of them, some of them will end up being awesome one-way links. I have several PR 4+ links from directories that were new when I submitted to them but have grown, and often are no longer free.
From the cons: This is only true if the directory is a tiny general one with hardly any categorisation. It doesn't apply to most directories, and certainly not to any of the ones that have been established for a while.
Well...directories like - Dmoz, Yahoo, Joeant, illumirate, abilogic, avivadirectory, alivedirectory are really helpfull to your site.