directory submission still works... I just experienced it a few weeks ago. I did 1000 directory submissions and noticed an improvement of 2 positions....
I think the key to this is making sure your website is listed in relevant a directory to your niche. Google likes websites that curate information well, being listed in a generic directory is not so great but let us remember Dmoz and Yahoo directories are generic and everyone wants to be in those right?
It works, but many of the web admins for the directories want a reciprocal link, if you gave them all they wanted your site will have too many links and may be downgraded
If you want high ranking in less span of time then directory submission is not for you. Website approval process is very slow in directories. There are some instant approval directories but getting approval is not enough. It must be crawled by search engine's crawler. So i thinks it works but takes time in giving benefits to your sit.
Answer is YES. Directory submission is still must do SEO techniques in some way it help. Change is natural same way there is some changes in directory submission there are many webmaster who build spammy network which are really need to ignore like Chachko Directories. Google already banned it. We have to provide same mail ID from domain, need to submit in right category and have to confirm emails.