That's where the "traffic" is coming from.
Let me be more specific. When I indicate to people that Kingbloom drives traffic to sites, its not necessarily traffic derived from people that came to Kingbloom.Com and searched for something and then landed at your site.
Its because someone does a Google or other SE search and finds a link in the Kingbloom directory and ends up clicking it and eventually landing at the site the link was directed to.
What's useful and effective about a well run and put together directory is that it is able to harness the collective power of a keyword or keywords and description in an organized enough way that listings within it show up in relevant search results in an SE.
I'd submit that now more than ever directories are not only effective and useful, they are crucial to maintaining a SE's content.