Blog directories are good. Those who think of link building in the short term may dismiss them because there might not be a rank pop or even toolbar PageRank. But that's not what link building is about. Link building is not about the toolbar PageRank and the perceived ranking that TBPR 4+ link is going to get you.
Link building is about getting your site seen. A blog directory is good because it should get your site seen by your peers and those who are looking for a blog to link to and those who are looking for a blog to read.
your peers These are people who might like one of your articles and link to it or discuss it and refer people to it. These are people who may decide to blogroll you.
those who are looking for a blog to link to From time to time some publishers, from the low to the high quality, want to link to something useful. A list of blogs in a particular niche is a good place to find those useful blogs.
those who are looking for a blog to read. Word of mouth referral is a good way to build brand. Get your social media chiclets and tell a friend function front and center.
You see how something like this, relating your effort to getting your site seen is important? This is what link building clients and professional link builders get wrong time after time.
[edited by: martinibuster at 7:19 am (utc) on Dec 11, 2012]
We use blog directories. They are primarily a vehicle and are not used as much as a starting point as most directories are. They widely portray less "SEO Link" signals in my opinion that standard directories and syndicate content. Win, win.