City directories are the predecessor to telephone books. Generally a city directory will contain an alphabetical list of its citizens, listing the names of the heads of households, their addresses, and occupational information. Some city directories list adult children who lived with their parents but were working or going to school. In addition to the alphabetical portion, a city directory may also contain a business directory, street directory, governmental directory, and listings of town officers, schools, societies, churches, post offices, and other miscellaneous matters of general and local interest.
City directories are primarily useful for locating people in a particular place and time. They can tell you generally where an ancestor lived and give an exact location for census years. They are also useful for linkage with sources other than censuses. If your ancestors moved around a lot, city directories can help you follow them from one census year to the next. Once an ancestor has been found in a city directory, there are several ways the information can be used to gain access to, or link with, such sources as censuses, death and probate records, church records, naturalization records, and land records.
Not all cities published city directories and, if they did, there may have been years in which a directory was not published, possibly due to budget restraints. The information in these directories is not perfect. They were not required by law as the census is so if you don't find the person you're looking for, that doesn't mean they didn't live where you thought they lived. If a resident wasn't home at the time the person gathering the information for the directory visited, he/she may just skip that home.
Ancestory.com has a large database of city directories that have been digitized and indexed. Many libraries have copies of original city directories and the Family History Library has many on microfilm.
For more information:
RootsWeb guide to city directories - http://www.rootsweb.com/~rwguide/lesson20.htm
Cyndi's List resources - http://www.cyndislist.com/citydir.htm
City directories of NYC - http://www.cjh.org/pdfs/CityDirectories.pdf
City directories at DistantCounsin.com - http://www.distantcousin.com/Directories/