Hello, I just got of the phone with my cousin that works with google, and I asked him about how PR is calculated, and he told me that no one there really even knows but one thing about directories with PR:0 is that they are actually benifical to you. If the next update brings the PR up than you will improve as well, if it doesn't, you do suffer a bit, but such an insignificate amount that it wouldn't even matter.
You probably meant to say "submitting to directories with PR0" or "linking from"? Otherwise I don't see how "linking to" them could improve anything. Anyway, you are right. PR0 directories, as long as they are free and seo friendly, are actually the best ones to submit to, for several reasons, anyone who says otherwise (surprisingly plenty) doesn't understand a thing about directories and SEO.
You won't suffer anything by getting a link from a PR0 directory or site. The worst is that it won't pass much PR. Many free directories don't have high PR inner pages, and the ones that do, have their PR diluted because of the high number of links per page. PR from non-relevant sites doesn't help your rankings, but a higher PR can help in your link building as a lot of webmasters will only trade links with sites with X amount of PR. Some directories have a PR0 because google isn't passing PR to them. I personally do not believe there is a lot of ranking benefit from most free directories. I think google devalues the benefit of these, but since they are free, they can't hurt. I have been running websites for over 8 years and have done extensive testing with about 50 sites and can't say they currently have a large impact on rankings with google - even submitting to hundreds of sites. They probably have the most positive benefit with MSN. For google, getting backlinks from relevant sites are far more valuable than most directories. There are a handful of directories that google seem to give any type of real weight, and other than DMOZ and perhaps a couple of others, they are usually paid submissions that have a human review which doesn't accept any site that is submitted.
I have built websites, of course in less competitive fields, that were ranking solely thanks to links from web directories, they had no other links. Anyway, agreed on the thing that links from directories have much less power than relevant links from relevant websites, in Google, and also benefit with MSN is much higher than with Google.
If you have no other links, then a any can certainly help a little. I've had a website that ranked #1 on goolge without any links based on the domain name being the keyword, but it was on a semi-competitive keyword. When I say no links, I mean no links I obtained. Most websites will eventually be found due to the various sites that publish domain registrations. To be clear, I actively track keywords that are considered fairly competitive to extremely competitive - so that is what I was referring to. As I'm sure you know, you can also rank well for non-competitive keywords based only on "on page" optimization. I've just noticed that a lot of directories are not showing PR on inner pages anymore - as it seems google is weeding these out. A lot of DMOZ clone sites are also getting hit. I use the yahoo directory, but it wouldn't be a choice for everyone because of the cost. I personally think the Microsoft Small Business Directory is one of the better values for paid directories. You can get up to a total of 10 links in three different categories (allows you to deep link) and edit your listings whenever you want, or even transfer it to another site. It's $50 a year, but with 10 or more sites, it drops to $30. Your listing placing is based on submission date, and some categories are getting fairly crowded.
I'm pretty new to SEO and link building. Since I began working on my website--around 8 months ago I believe--I had mainly been submitting to free directories for the first 5 months I'd say. Almost all of them were PR0. As you guys have said, I definitely noticed the difference on MSN and Yahoo but not Google. Once I started writing and submitting articles and submitting to a few paid directories such as Microsoft Small Business Directory and Seoma and others, I've been showing up in Google SERPs as well. I love this stuff!
You should also ask him the perfect optimization procedure needed in order to get your targeted keyword on the top rank position .