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Directories might not give you much traffic but yes they do help in SEO. Every link to your sites count as backlinks and backlinks are essential in SEO. Just make sure that you submit your link to quality website and not to link farms.
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they aren't too bad. i wouldn't pay to be placed in a link directory because there are so many of them. a good one is dmoz.
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The traffic from them is likely to be minor and the SEO from them is alright, but nothing to brag about. There is better ways of getting traffic and building backlinks.
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Submitting to high PR directories are sources of quality and targeted backlinks for your sites. Just choose which directory you submit to - quality, PR and heavy traffic as well as submitting to the right category helps you get targeted traffic from these backlinks ;)
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