I heard that yahoo charges a hefty amount to submit our sites to their directories and wonder whether is it really a worthy investment considering there were numerous free directories sites out there which accept our sites for free?

For some niches, the $299 fee is worth it, but for most, I hear it's not.
It'll help your rankings within the search engine though, but again, for most niches, it may not be worth it.
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If you can just toss the money and are serious about your site. Just for a personal blog or something, it probably isn't worth it.