Submit to Directories Effectively

Some points to note before starting
1. Budget - How much are you willing to spend on submissions?
2. Purpose - Just increase to Page Rank or to drive traffic to your site or both? Or is it for prestige and brand awareness? Most directories wont give you decent traffic, even Yahoo! or Business.com or maybe Microsoft bCentral Small Business Directory may not increase your sites traffic.
3. Planning - The most important part of your link building campaign. You need to spend a lot of time knowing which paid directory to submit to and how to submit your site to, what anchor text and meta tags to use and the niche or market you are looking for.

Some general points to note when submitting to directories
1. Make sure you read the Terms of Service (TOS).
2. Always submit to the correct category (if not possible, something similar) to increase relevance.
3. Make sure your description is correct without any spelling mistakes. Add those all-important keywords in as well.
4. I would not encourage too many reciprocal (2-way) links. These are too troublesome and may work against you if the directory is blacklisted by Google. If you must, try linking to big directories or reputable ones. There have been reports that reciporal links have been devalued by Google.

Free Directory
Sure, go ahead. Its free so might as well submit to them even if they have zero PR. Every bit helps and you will not know whether in the future their PR will rise and can help your improve your PR as well. Just try to avoid link farms (directory with tons and tons of links per page) and sites which are blacklisted as they are useless and seldom get indexed by Search Engines at all. Also ensure that they have static text links because some dynamic links(especially those that looks like session ids) wont push PR to their listed sites.Some directories have the nofollow tag in their url links, these links are virtually useless to you. Remember to vary your title keywords and descriptions whenever possible. Think of them as anchor text and use them to your advantage.

Paid Directory
Depending on how much you are willing to spend, you can even have links to your site from PR9 directories. My suggestion in choosing which directory is as follows:
1. Page Rank Value - Check the PR of the directory and the category in which you want to submit your site to using Google's toolbar or by using PR checking sites.
2. Static Links - Make sure they provide static links, which can help you in improving your sites PR better. Do a search on Google (site:directory.com) and see whether their category pages and listings are indexed.
3. Number of links per page - The less the merrier. In my opinion, the optimal is 10 links per page. Sometimes smaller directories (and thus less links) with a decent PR can help more than a big directory (and thus tons of links) with a high PR.
4. Featured or sponsored links - It's good to be on top, because Search Engine spiders will crawl from the top to the bottom. This ensures that your link is being more likely to be crawled.
5. Correct category - Make sure you are submiting to the correct category. And make sure the category you have chosen isn't crowded or populated with too many links or it will be not as effective. If your first choice category is too popular, try some other category that is similar and has less links on it.
6. Do a backlink search for the directory you want to submit to. For Google, try (link:directory.com) and see the number of links they have. From the results, you can see the number of links to that directory and it will give you a rough indication of how well this directory is doing and whether they can maintain their PR.
7. Choose a local or a regional directory if possible, as these will at least give you a better amount of traffic as well as PR.
8. Niche directories are better - They are targeted and usually have less links listed just like a local or regional directory.
9. Vary your descriptions or even your title you submit to directories a bit so that it would look natural to Search Engines. Do a combination mix of keywords.
10. Do not submit to too many directories in one shot. Try to limit your submissions to a hundred per week at most to make it look natural to Search Engines.
11. Deep links are good. Most paid directories allow you to link into your internal pages. And if you link to your internal pages, vary your title, descriptions and keywords accordingly.

Manual Directory Submission Services
I won't recommend using these services. It would be better for you to do it yourself.

Other articles:
Increasing your Page Rank In Detail
OnPage SEO For Web Directory Owners
Link Exchanges Techniques
Additional Benefits of a High Page Rank (PR)
Secondary Article Writing - Link Baiting
Sneaky Bastard's Way of Getting Backlinks
Tiny Preview and Screenshots for PhpLinkDirectory V3.2.0
Outgoing links - Telling Search Engines what your page is all about
A Complete list of Directory Scripts
How NOT to run a directory - a submitter's point of view
Some tips for the paid directory owner
How often does Google cache your Site? A Project.
Raising PR - Problems with paid directories and what to do.
Our exclusive interview with Paul le Roux of WebWobot Search Engine
Good Planning = Good SEO = Results!
Article Writing for Search Engine Optimization (SEO)
Forget keywords meta-tag and think keyword density!