Yes directory submission is working, you need to do it properly you must submit your website in the relevant category in the directory, directory increase your keywords popularity and give you free traffic.
I would agree with Spyrit, you do it mostly for backlinks. you do get some traffic but in my experience, not a whole lot. Sunil, thanks for the list, very kind of you. These sites are easier to post to since they don't require the captcha and reciprocal (way faster!)
Dear friends you dont need to use reciprocal link you can just add you blogs in specific catogry all these directories dont need to use reciprocal link