My forecast (with my past experience and instinct as inputs) says that, Search engines will introduce into their algorithm that distingishes few trusted directories such as ODP and Yahoo, and devalue all other directory listings. If itsn't happening today, will happen tomorrow. The word will spread, webmasters will spend less time on directories, directory as a component in the link popularity mix will gradually lose out, to a point where FFA, Guestbooks are at now. Majority of today's directories will shut shops.
I believe they (search engines) have started down that road quite a while ago. General directories "if popular" are way too much work for a couple dozen people to take care of if you plan to keep any type of quality (actually reviewing, describing, and categorizing the sites/submissions). The problems with general directories are - they are so large very few inexperienced users will drill down to find what they want. This leaves it up to the search engines like Google to direct users to the proper category of listings. If they dropped returning results to directories, most directories would never be seen. My own belief is general directories have been dead although I still have respect for one or two and some of the people who manage them.
If you can't get your head around the notion that a directory ought to be able to launch, grow and stand on its own - without any assistance from search engines - then you ought not get too invested in the realm of building a directory. No kidding.
Directories and search engines are essentially at war. They have every reason NOT to be friends. That doesn't mean directories and search engines can't be friends.
Am I a nut or did I just hand you the manual for success in this realm? I dunno. I just may be crazy. I may be crazy to encourage or lead anyone to think outside the search box.
Yes, you are nuts..hehe I guess it all depends on your measure of success. If you are building a directory because you are interested in the subject, classifying/categorizing sites/listings, and you don't care if it turns a dime or not for your time - then you are correct. I'm not saying directories or any other type of site has to turn a profit to be successful, it all depends on how one measures success. The truth of the matter is people are relying on search engines more - not less, so if you fail to take that into account you could be on the losing end. The idealism that you don't need search engines is a great one- the facts reflect differently. For every website that does not need to rely on search engines for the bulk of their traffic I would venture to say that there are "conservatively" at least 500,000 that do. If you can build a one-in-500,000 website and maintain it, I say the more power to you and congratulations!
As far as niche directories, I believe they will fade soon if that's all they are. I really enjoy directories, but you really have to be different and add some value to the site besides pages of listings in my opinion.