No.. you do not have to pay for traffic for it to convert well.

1: Is your traffic targeted?
2: What are you trying to drive traffic to?
3: You said you've tried Yahoo Answers, You Tube, Social Bookmarking Sites and Press Releases. About how many visits are you getting from this on average?

Give us a little more details and maybe we can help you out.

To answer you question though, free traffic converts very well if it's targeted and it depends on the niche. If you know how to target a hungry crowd and you send them in the right direction, they're going to eat.