Welcome to the Local Search Forum MadScientist. You are in the right place.
>>how do you go about getting the database information for a local yellow/white pages?
There is advertiser distribution and then there is business data licensing.
If you want to distribute advertisers you can strike a deal with groups like epilot/interchange that will allow you to easily display their advertiser base (rev share)along with their core business data. In regards to data there is really only a handful of providers that are able to provide you with a comprehensive data set to license. They include GeoSign, Acxiom, and InfoUsa. You can license their data for display in your utilities.
>>In what form does this data come to you?
In traditional data transfer forms.
>>Are there updates, or is it up to you to keep your information up to date?
There are updates and often the cost of the license coorelates to the frequency of updates.
>>What is the cost of acquiring such information?
It varies according to your needs. It isn't inexpensive however.
>>Is it feasible to offer this directory service as a small part of your overall content, or is this a huge undertaking in itself?
Don't know what you are doing, but it is possible.
I recommend you first check out the epilot/interchange platform that can give you a very inexpensive way at advertiser data and an acxiom feed.
GeoSign has great data too that contains more data points like URLS.