I have not worked with them, but a search of the site, and a search that brings up examples of articles in use as described leaves me with little that I can say without potential interpretation of TOS. Run some searches. See if it is something for you. I would decline.
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I am very scared that it will create duplicate content issues resulting in a penalty from Google.

Well, yeah. It you use it - and they use it - it could head towards devaluation. However, there is so much ripped content out there it is not my impression that SEs are overly quick to punish duplicate content. I don't think that I've ever been seriously damaged by ripped content, even when discovering that it has taken longer than I would have like to find an infringement and do the C&D to get it down.

Another example (a bit off the path of your specifics), could be book reviews. 1,000 sites rip the same blurb from the publisher. Nobody gets punished, but nobody gets points.

With a closer look:

The article pages I looked at were loaded with AdSense and the author's link is minimal.

Scroll to the bottom of the page and there is a link for every state. The same article for every state with 'junk listings' of potential service providers; nothing more than page filler.

Scroll down and every state uses the same article for many cities/regions within the state.

The article is being reused hundreds of times. Would you use this directory? If you are getting PPC cut - maybe there is something in it - but somebody would have to tell me they personally came out ahead on this.

Gussied up directory that recycles content from generic topic, to state, to city. Maybe there is PPC money. What is your cut? What documentation of average clicks per month? If you find real article providers that give positive feedback..... But this thread has sat quietly amongst users that know all of the tricks as well as the good and bad neighborhoods.

Last year I let DirectoryM syndicate a couple of things I had written. One was an in-depth article specifically written for DirectoryM, and the other was an excerpt of several paragraphs from an existing article.

Each ended up with more than 4000 copies. The articles on my own sites consistently appear #1 for phrase searches, so there doesn't seem to be any harm done from all those duplicates, but there's no discernible benefits either. From May of 2008 until today, Google Analytics reports exactly 12 visitors originating from the full article I wrote specially for DirectoryM ... that's from over 4000 copies of the article, remember.

They stripped out the links I had included in the body text, so no benefit there. Every copy of the article had a link to my site in the author credit, but each copy also had dozens of other links too. On one I just checked, the page had 143 links besides my own.

I'll leave you to do the math about how much link juice might flow from that. Consider also that there's reason to believe that Google gives reduced weight when the same link appears hundreds of times on the same site.

Your results might vary, but if they ever call me again I'll say a big fat NO.

Thanks for sharing your experience. It looks like they syndicate your content on your own site using RSS feeds and then fill it with ads. They seem to try to put in local subdomains so that comes up in searches like sanfrancisco.mysite.com and then split up the content and add that city name inside the content before your keyword. So furniture always appears as san francisco furniture and the like.

In theory it sounds like there is some ability to grow traffic but I don't know anybody that used them and saw any benefits. They talk about big companies on their site and i have seen some directories lingering from big sites.

I worry about the penalty content. More I wonder if there is really any benefit you get from having this on your site and even more about if there is a real loss if you remove all of it. It could create thousands of extra pages that are gone if you decide not to continue.