Are paid directories considered paid links?
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I've only ever submitted my sites to tons of free directories, not the paid ones. I'm thinking of getting into a few paid directories now, but just wondering, anyone had experience with a paid directory link being treated like a paid links an penalized or anything? Has it helped you?
My competitors has a lot of backlinks from paid directories, so I"m thinking of doing the same thing. But if Google thinks of paid directories as paid links, I would be better off just turning him in

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Great question. It really depends on the directory. As a general rule, if the directory is advertising that is "sells links," those links are likely to be valueless, or potentially even detrimental.
On the other hand, directories that have fees for "editorial review" (i.e. dir.yahoo.com, etc), are less likely to have that problem.
Generally speaking, if a directory is specifically relevant to your site (i.e. content and/or geography), the directory will likely have more value than a general biz, or non-relevant directory.
I also like to stick to relevant directories with DA equal to or higher than the site that I'm submitting.
In my humble opinion, the value of submitting to a large number of low quality directories, as well as, article directories, is very low if not non-existent.
However, if you find higher quality directory links in your competitors' back link profiles, they may be worth the investment.