The answer to that question is yes and no.
Paying doesn’t mean you will get a search engine benefit or traffic for that matter. Getting a free listing doesn’t mean that link is worthless.
I think that when you submit to directories, money should not be an issue.
Look at the directories or take people\s recommendation.
I personally recommend every single directory in my
Digitalpoint Signature.
I also highly recommend submitting to directories featured on the first pages of the
Google results for directorycontest.com.
You should also take a look at the
Searchfeature.com Directory of Web Directories.
Bookmark all of those sources and pass them on.
More than anything I recommend Directories allowing deeplinks like my own directory, the one and only Mike Dammann Web Directory which requires good and unique content in order for a page to get included, but won’t differenciate if it’s a homepage or a 3rd subfolder on a subdomain name.

See the previous entry for a list of good quality directories allowing deeplinks.

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