I don't think you can make blanket statements about directories and have the comment carry for the entire community. Each directory is marketed and constructed differently making it an unique property and unique in it's contribution to your website.
Inbound links and the effect they have on your webPAGE/site is an algorithmic function, search engines don't care if they eminate from a directory, a blog or an ecommerce webPAGE. Their "weight" or their influence is directly related to the PAGE they sit on (which includes what sits on it) and the anchor text you use.
If the directory PAGE the link sits on is indexed and free of exclusions it's going to pass along some link popularity. The more outbound links on a page, the less link popularity each link is able to pass. But each does pass some.
The "age of domain" criteria is not an absolute, we think older pages pass along more link popularity through their outbound links, it makes sense that they do but we're not 100% sure. No search engine has presented this in writing as an absolute.
Patent applications are not absolutes. What we think we see in search engine results and backlinks are not absolutes. It's what the engines want us to see.
And while a domain may be "old", the page your link sits on might be new... in that case the page will not automatically be considered old and enjoy the same relevance and influence. Search bots take note of what they find and when, it's all considered. Which is not to say a new page sitting on an older site wouldn't accumulate trust more quickly but it's not an automatic grandfather clause.
Having said all that, I'll also say this: I am, and always have been a supporter of the editor run directories. I feel their presence on the Web is a bonus given the way they determine inclusion to their properties.
And IMO, this is where a lot of the "trust" issues come into play when talking about what direoctories the search engines trust. Here's a direct quote from Google Engineer Matt Cutts on this issue:
If there is a fee, what’s the purpose of the fee? For a high-quality directory, the fee is primarily for the time/effort for someone to do a genuine evaluation of a url or site.
My short answer to the original questions:
Do Directories really improve rank?
Yes, they do becuase a link from an indexed page will pass along some link pop and all link pop helps.
or are they considered link farms and bad neighborhoods by google?
No they aren't if they're editor run and avoid things like sitewides links or other linking tactics where the sole purpose of the link is to manipulate search engine ranking. Perception is 9/10th's of the law in link building these days.