With thousands of low value web directories available, choosing a decent one to submit to is a hard task. A lot of webmasters decide to submit to 500 free ones but unless you have a lot of natural links to counteract the unnatural directory links you might find yourself with a spammy link profile.
The value in submitting to directories is to gain some high PR links and co-citation. Decent directories have a lot of incoming links and PR so will help your site get more pages indexed. This is of particular importance to affiliate sites as it can be hard to attract natural incoming links.
The key issue is to find a few (less than 10) decent places to get your links from. The first 2 on my list are Yahoo and Business.com. For me they are a great starting link for affiliate and commercial sites. If you are running a blog you can probably get enough natural links to not need to submit to these but for most other new sites they are a must have link in my opinion.
If you do get accepted to the Yahoo directory make sure you use the NOYDIR tag on your web pages otherwise Yahoo might use your directory description in the normal search results pages.
My next favourite directory is the Aviva Directory. The reason this stands out is because the owners have been linkbaiting. 99% of directories don’t have any natural links but Aviva has even been on the front page of Digg a few times so has more trusted links than most of the other directories put together.
I’m not going to discuss any other directories by name as there are plenty of other lists on the web already. The best way to find a few more is to search Google for directories in your niche. Use search terms like “cell phone directory” or “cell phone add link” if your site is about cell phones.
Other good methods include searching for all the places your competitor’s sites are listed. Use Yahoo site explorer to find links to the sites and search Google for all the places their url’s are listed.
A big issue for me with directory submission is knowing when to stop. Once you have been listed in about 10 decent directories there really isn’t any point in getting any more of these types of links.
For more details on how to choose a directory Aaron Wall has some discussion about checking the cache date to see how trusted the pages are. Trusted pages are crawled more frequently than non-trusted ones.