NickName...I dont think the idea was to use the root of the domain for just a free site....although it can be done...a secondary directory would suffice for the non-mirrored sites. The idea being that you stay away from mirroring to avoid any problems with dupe content.
Remember that the difference here that DDave mentioned is that you are not going for the big traffic from LLs but the link positioning....you can whittle down the LLs to use to 9-12 for that purpose. If you want free sites for traffic from LLs, just do it on a different domain, with different text and name the pics something different...or use slightly different pics..pretty easy approach. You might have to wait a while for the LL submits for traffic to make sure you dont flood them with dupe sites.
A clean DMOZ free site should get you some nice incoming links as long as you remember that the link coming from DMOZ should also have targetted text
The root site can have more content and be extremely attractive to DMOZ and others which as Bill mentioned, if you have good content (text in this case) is a sweet spot for SE's.