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Directories are created by a person who actually profiles your submission, as opposed to a search engine that uses a 'robot' or 'spider' to do this. Sites are submitted and then assigned to an appropriate category or categories. Because someone is actually profiling your site, rather than a 'robot', directories often provide much more targeted results than search engines. For example: Yahoo! is a directory.

Search Engines:
Commonly referred to as "spiders" or "crawlers," search engines are searching the web for new pages at all times. Because they are automated and index so many sites, search engines may often find information not listed in directories. On the other hand, they may also pull up unrelated information for the topics you're searching for. 

Combination Search Engines/ hybrids:
Many of the medium size engines have helped confuse the issue of what the difference is between and engine and a directory by combining the two. These are search engines that also work in conjunction with a directory. Usually, these are reviewed and rated sites.

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