Planet13 - 4:58 pm on Jun 14, 2011 (gmt 0)

They have roughly 100-150 backlinks. 100% of those backlinks are from paid blog posts and directories. Anchor text is all exact match.

The problem with this is, of course, while they are at number 1, they are probably getting natural, unsolicited links, by simply being at number 1 (if their content is any good at all).

Also, for what it's worth, they will be getting whatever social media love their is out there for that niche (facebook likes, etc).

I really don't know and lamenting sort of the same thing in my niche...

I think you should have at least a couple of directory submissions though. Just a handful with your site's name in them. Maybe it won't help with raising your page rank but maybe google thinks a diversified link profile will at least contain three or four directory listings.