We maintain a small directory ad in our local daily... much less than what was being run when I bought the place in '86. This year, we got almost no comment about the ad, one way or the other. However, by purchasing even this small space, I can expect a certain level of performance from the paper... namely, that they'll manage to publish the PDF file I send them each week.
The free "trades" listing really leaves you with little to gripe about if they get something wrong... it was free, after all.
I do agree about the increasing value of the web over newspapers. We're even seeing less usage of our telephone system as daily hits on our web site go up. I think that's good, since I pay almost 3 times for one business phone line than what my web host charges.
If all of your papers are universally popular, I'd pick the one that is your county's "official" paper. By publishing the local legals, that paper might attract a few more of the readers who actually look at the content.
Otherwise, to keep the peace (if they really care), you might consider some form of annual rotation.