If i put my website on free classifieds and their rank is either low or high does that effect my websites rank as well ?
It can, depending on the classifieds site and whether they allow follow links.
For a nice list of the main classifieds site, have a look at this site: http://www.free-online-classifieds.com
For a long and exhaustive list of pretty much every classifieds site, have a look at this one: http://www.thetoptens.com/best-free-classifieds-websites/
My personal favorite because it does cross-posting to craigslist (so 2 posts with 1 click): http://www.vendalism.com
A nice blog discussing all things buying & selling: http://www.alunei.com
free classifieds helps to increase traffic for local search and also map can be added advantage
It most certainly does not.
Simply advertising your site and sourcing traffic from it will not have an impact on your rankings unless the source is a harmful.
Particularly for small business advertising, I would suggest you try this website:
Allows you to create banner style visual ads for free and showcases the ads on the site's home page