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The benefits of paying are to be included in Looksmart, Ninemsn, GoEureka and Optusnet.
I would go for it!
The main one, pointed out by stricko, is Ninemsn - currently the most popular Australian based search engine and it consistently delivers decent traffic with a good Looksmart submission.
You really need to run some of your target keyword/s through NineMSN and actually see what you get in the way of directory results (i.e. from Loooksmart). For some of my targets there aren't any directory matches. Or your likely Looksmart Title/Description/Category may only give you a very narrow range of matches. My strategy is to aim for high web page results across a greater variety of keywords using several different relevant pages of my site and going through Inktomi/PT paid indexing program. I'm quite certain this is more effective ROI for my field. My homepage was already listed in Looksmart, but I'd struggle to justify the current annual charges for listing.
If I typed Minidisc Australia our site we be listed top, but if we typed minidisc it wouldnt be seen for a couple of pages. Most people would type minidisc into ninemsn instead of minidisc australia so $440 is a good investment for me. I'm waiting on what rank I will receive.