Granted, you can add links directly through WordPress, but the presentation is wanting. The WordPress Link Directory is what I’ve been looking for:
1. Organizes links by category
2. User submissions
3. Reciprocal links (which I do not use, but it’s a good feature)
4. Directory page
I hope some additional features are included in future upgrades, namely the ability to search the directory, and also to pre-approve links before they are published. I wonder about spam controls on this plugin, but I’ve not experienced any difficulties.
My links directory: http://agabus.com/?page_id=1383