In my personal experience, directory submission is no longer a good way to get backlinks. I have done directory submission for one of my sites, one year ago. I submitted to more than 1000 directories. But in Google Webmaster tools, I only see 10 or so backlinks coming from those directories. Anyway, submitting to only high PR directories is still a good idea.
number of backlinks are increased. it can be useful if you are getting listed in related directories.
I have been a directory owner for a few years now and have constantly updated new listings every day. It is a regional specific directory targeting Sydney Australia. I have very strict guidelines for submission and i think google has recognised my site for that. I rank quite well for a number of great competitive terms. Normally i only except urls with the australian .com.au domain although i do let some others through pending a quick look over their site. If you are a directory owner the key is quality not quantity. Google rewards this.
Of course that quality backlinks are better but if you can get links in many directories (and this is made in a regular basis - not 1000 directories at once, maybe no more than 20 daily) you can get some results
Trust me, submitting to directories for the keywords you want works as not only for backlinks, but also to improve SERPs for those same keywords. I recently submitted a site of mine for a certain keyword which is the site name of a competitor to several directories a few weeks back. Today I checked Google for that keyword and my site is on the first page, same as the competitor's. Those who argue that web directory submissions do not work probably never did directories submission in the first place.
Getting your site listed on human edited directories such as DMOZ will help a lot, and Yahoo directory to some extent. DMOZ is free, Yahoo is free for personal but you pay a fee for commercial sites.
It's really important to consider your specific needs and goals for your website, and your marketing campaign. Directory submissions certainly are not as valuable as they used to be, but this is the way of the Internet and search engine algorithms. People out there are constantly looking for ways to quickly, cheaply and easily get to the top, and the search engines are constantly looking for ways to prevent that, and make their SERPS as relevant and useful to the users. There's something to be said for a site that's been around for years with loyal visitors, and it shouldn't be a simple matter of paying some data entry team to submit your site to every directory on the Internet to get ahead of the sites that have spent a lot of time and money in creating a useful website. Directory submissions aren't going to get your site blacklisted anywhere, so it's still useful, but it's not a superior SEM plan.
I would say that 99% of the directories are not worth the time you are spending for them. Better to look for different links.
I must disagree. Google shows only a sample of backlinks so this can't be trusted as it is incomplete. Yahoo Site Explorer is better at showing backlinks but still limits how many are displayed. Submitting to high PR directories is fine if you are paying for a review fee. But many legit high PR directories that accept free submissions take many months to review free listings. Some just delete them without telling submitters. Just recently I took a clients site and ranked it in the top 50 for 4 keywords that have a combined search volume of 2500 searches per day. The way I did it was submitting proper anchor text/descriptions to free directories. They were not even in the top 500 for these keywords before I started submitting to directories. I understand that my opinions regarding directories can be subjective because I own one and operate a free directory list. But the facts speak for themselves. Directory backlinks do help, but are only a small portion of a solid backlink profile.