I can definately see how that is worth money on todays internet. In which case I can see the usefulness of Yahoo! listings as a factor in the Google algorithm.
Thanks for everyones advice on this -- I think I've got a pretty clear picture of how it all works now with paid links. I can see how buying 'trust' in terms of a website like Yahoo! saying your website is not spam can be handy info for Google ranking algorithm.
The nature of the web is such that a directory's usefulness will diminish in approximate correlation to the growth of the webs content. That's arguable depending on the policies of the directory but you can see how hard coded directory pages containing millions of websites can't provide the information as well as a search engine. The only way to get around this problem would be to increase the strictness of the review policy inline with the growth of the internet, while keeping listing numbers limited, therefore using the directory as a sort of means of achieving natural selection based on the evolution of the review policy strictness.
Googles algorithm still rely's largely on human opinion and money -- but then however you look at the algorithm it will eventually boil down to those two things.