The RSS Feed submission tool works in a very similar way to the Bookmarking tool but the ways in which it can benefit you in terms of SEO is quite different and often misunderstood. I'll use the example of a blog to describe the way these two things work. If you use popular blogging software such as WordPress, Blogger or many others, whenever you publish a new blog post a couple of things will happen - firstly a permanent link will be created to your new blog post, and secondly, the RSS feed of your blog will be uppdated to include that link.
An RSS feed is a resource that shows the latest content from a source and the key thing about RSS is that it is updated automatically! So in the case of a blog, each new post will cause the RSS feed for that blog to be updated with the link to that blog post and this happens behind the scenes. By submitting the RSS feed to directories, you provide another way for your blog content to get syndicated and another way to distribute your backlinks.