There is a lot of debate about if directories provide useful links or traffic. I think most will agree that the general consensus is that although many directories are useless junk, there are quite a few (beyond the usual dmoz, yahoo, joeant...) that are not. Which brings me to the topic of how to find the good ones.
Here's a few of my own tips, anyone with more to share, please pitch in.
One of the first things to decide is if you are looking to get traffic from a directory or if you are looking to increase your backlinks and maybe even your PR. If you're main goal is traffic then getting listed in topical directories (topic specific) is the way to go. Topical directories will usually bring more traffic than a meta directory. If your going to try and get links for traffic purposes from topical directories, then I suggest going to Alexa and drilling your way down through the appropriate category and find a subcategory for "directories" or "resources" under your topic. For example: Top > Recreation > Travel > Guides and Directories. Since Alexa ranks by popularity, this may be a good way to find the topical directories for your subject that get (and therefore give) the most traffic. Topical directory pages will often have lower page ranks than a meta directory, but the value of the link will likely be higher because the topics and sites and very related and more focused than a meta directory.
There is also value in meta directories, but there are many useless ones and it can be easy to waste your money and time, and if you link back to the wrong one, you could even damage your sites positions, Just like you can damage your sites positions by linking to the wrong site or a "bad neighboorhood". So, how do you find which ones are useless, and which ones aren't? Here's a few things I look for, first I check the backlinks to the directory, if I see that most of the backlinks are from one site or a handfull of sites, I will not submit to it. If most of the links are from other directories, I will not submit to it. Now I will check to see if the directory is fully listed in google, yahoo and msn. Yahoo seems to ban more directories than anyone (probably triggered by excessive cross-linking), so chances are that if it has more than just the homepage listed in yahoo, then it's probably listed in the other SE's. If it's banned in yahoo, msn, or google (only the homepage shows up), then I will probably not submit to it. The last thing I can think of off the top of my head is to check and see if the directory comes up in the first result for a search on it's address without the http ://www and without the .com , .org or whatever the extension is. If it does not come up first, I probably will not submit to it.
When you submit to a directory (meta or topical), drill down to the most specific applicable category. I believe it is a mistake to think you will get more PR passed on by submitting to the category of "restaurants" because that page is a PR5 and the category "restaurants > florida > pensacola" is only a pr3 . You may get just as much pr passed on from the pr3 page and more importantly, the link will be more relevant and therefore more likely to boost your positions in the SE's regardless of the PR.
Last suggestion, don't go out today and get a dozen links from directories, even if they are good ones. Take your time, I don't know how many new links to your site is "too many too fast" depends on your subject, maybe just one a week or so, but your better of pacing yourself.
Tips? Share them if you got them.