Web directory , as the name says a directory which has many websites or web pages collected and categorized as per the classification that people can come easity notified. there are also called as business web directory .there are some famous directories like Yahoo directory . The major search engine google also has a directory DMOZ.
The classification can be like computers , internet, people , family, public relations, etc., The web directories can contain a lot of web pages with a title description and the link to the same website.
This is also helpful in building the links to the particular website to make them come up high in the rankings
Adding a link to a directory is very benifit and can be used for many purpose and the listing must also be in a perfect category or the exact sub category in which they are meaningfull. If there is a category mismatch then even if u provide many links its considered to be waste content and nothing is going to be benifited. There are a lot of blogs available to get the links structured and they will follow the basic things from the directories
The web directory plays a important role in search engine optimization. they give a high page rank priority and generates more back links which will be use ful for the search engine like google to bring up them in the ranking and other parts of search engine optimization .