I think they do. Or values them extremely low. The best is to get links from different kind of pages and not only from directories to simulate a natural linking pattern.
Google really doesn't like link directories because there are hundreds of links to thousands of websites and It's basically a question of quality of link vs. quantity of the link, google would prefer that other sites link to your site because your site is helpfull and usefull. Stay away from link farms and link exchange systems.
That being said quality paid directories for example Yahoo will do wonders for you PR.
Yes, I've read from many articles wrote by SEO guru, they told that Google now don't like the links from directories especially from paid directories.
