This is the first D6 compatible version of directory.module.
Drupal 6 version vs. Drupal 5 version
Directory.module for Drupal 6 is in many ways very different from the Drupal 5 version.
The main difference is that with Drupal 6, directory module does not handle the display of nodes anymore. It now relies on core's taxonomy module to do the job.
There are two implications:
1) The paths like directory/nnn where nnn was a term ID no longer exist. Instead, the main directory page links to taxonomy/term/nnn pages.
2) The first point means that the way the node teasers are displayed has completely changed. In D5 directory, the node display was broken at best. In D6, we rely on taxonomy to display teasers just like they would be displayed on the front page.
The taxonomy page is themeable, so if you wish to have a different look for the node listing, you can change it at the theme level. See the theming documentation about this.
The work for a stable Drupal 6 release of directory is still ongoing. There are still some serious bugs to fix, and new cool features to be added. D6 directory is still in alpha stage. However, it should be stable enough to use on a small site with not too many taxonomy terms.