Article directories are supposed to be a good way to build backlinks to your sites, using the keywords you want as anchor text. seos recommend submitting to article directories to build backlinks.
Google introduced the rel="nofollow" attribute. They say it completely drops that link from their link graph of the web. They also say they don't even use such links to discover the URLs that they point to - in other words, if that's the only place that address appears on the web, then Google won't even spider the URL.
However, such a link might help another webmaster to see and appreciate your site - and therefor give you a natural editorial link that does count. So a good article could be a form of marketing.
If they really liked the article, they'd be more likely to link to the article than to link to your site.
If you have the article both on the article directory and on your site, chances are that the version in the article directory will be treated as the original, and the version on your site will be filtered out as duplicated content. So, whatever you have on your site should not be allowed to appear elsewhere on the web.
But yes, you do need to figure out a way to promote your site so people will find your content and link to it. It's possible that articles written just for article directories might serve to do that, but that does represent a lot of effort that might be better spent in other ways and more directly lead to inbound links.
We have a whole forum dedicated to Link Development [webmasterworld.com]. Here's one of many threads from that forum I suggest you read. It touches specifically on submitting to article directories vs creating unique articles for topical sites of higher quality....
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