Directory submission still works nice for increasing link popularity of an website. But it has some limitations over bookmarking. Bookmarking is more versatile.  For example: if you have a blog on blogspot.com or wordpress.com you can’t submit it on most of the web directories. There are only few blog directories which may accept your free blog. Still you can easily promote your blog or blog posts on bookmarking sites. Similarly most of the directories accepts only homepage. Inner pages aren’t accepted by most of the free web directories. If you have an important inner page you can easily promote it on social bookmarking sites.

I like social bookmarking over directory submission for another reason: it is getting traffic. Free web directories rarely send traffic to the sites submitted. On the other hand popular social bookmarking sites like digg, stumbleUpon can send thousands of traffic.