I've paid to be included in a few directories, if they met my own strict criteria. One, they weren't overrun, two, I would get quality traffic and good PR. Again, it's worth it for paid inclusion if you can afford it. Although, I wouldn't break the bank to find out, only when your comfortable. Because I don't think any directory is going to thrust your site to the top of SERPs alone.
I will only use directories to increase incoming links. However, just trying to submit my site to all free, no back link required directories has taken weeks. May be months before I decide to pay for a listing.
I look at the end page on which my link will be placed. If it is of considerable PR (then I know it is indexed), theme is good with relevant content and the price is cheap enough, I might try it...
Sometimes the price is right! If you can get a link on a page with pr, even 1, for say a buck or two, why not? Anything else is just gravy. Still, I usually just submit to info.vilesilencer list every month....
There are some very good paid directories out there that generate traffic, not just PR. No sense paying for a PR2 link, but many have PR4 or better pages with good listings.
If I had the cheese I would pay for sitewide directory links only. Some directories have 1000+ categories and some expand to a second or third page. That's 1000+ possible backlinks
DMOZ and Yahoo directories began with just a few links. Nobody can predict which directories will be grow and become valuable resources in the future, but I can guarantee some will.
Hi Wazimm, I am really surprised by your comment - are you aware that sitewide links are discounted? Cheers, Johann
www.directorycritic.com has a good list of free and paid directories. They even have a list of directories that allow deep-linking. As for links that do/don't generate traffic, well. I have one niche directory that generates a lot fo hits for the sites in. I also have a general directory (the one in my sig) that has produced an average of ~30 hits a month for some of the sites in it. Other sites in the same category haven't yet averaged 1 click-through a month. I think this is more a sign of a bad description than anything.
I've used a few pay directories here & there, but more for advertising & traffic than for SEO. Depending on the directory's niche and your site's topic, you can get some good exposure for a very low price. I'll gladly pay $10 for a link that includes an image of my site on a good directory.
The benefit probably depends on the site's topic, but I think a well thought out thumbnail image can make your listing stand out and sometimes even attract visitors to click on it. I've seen more traffic from this technique on my crafts & gardening sites than anything else - people looking for those sites tend to be attuned to color schemes & visual effects. I'm not sure it would be as effective for a more standard-looking business or financial site.