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I still use them, I made 20 new blogs and did not submit them to directories...the only difference I noticed traffic wise was that the blogs that were submitted started receiving more traffic from Google earlier on. It wasn't that big of a difference but still enough for me to decide I'm better off taking the extra 30 seconds to submit every new blog. Just do a test and try making some blogs and not submitting them for a few months and then study your traffic to see if there's any difference.
The only badside I have seen is that if you want to sell hardlinks, some webmasters don't want your sites having blog directory links on them.
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