Truthfully, there are still some places that would frown on some self employment experience on your resume as they may see this as a sign that the person is not suited to be an employee. However, many companies recognize the value of having an employee who shows initiative and has a well-rounded variety of experience. Successful business owners demonstrate many skills that potential employers are looking for such as: leadership; project management; accounting and budgeting; initiative and entrepreneurial spirit.
MY TAKE: In my experience recruiters for full-time jobs will often spread this myth in order to convince you to apply for jobs with their clients. Contracting recruiters will claim that the opposite is true. My experience with employers and human resource professionals has been that they recognize the value of hiring people with the diverse and well-rounded backgrounds that self-employment allows. The main questions that potential employers have are: why did you become self-employed? why do you want to return to being an employee? why now? why here? If you can answer these four questions satisfactorily then even the most skeptical employers will consider your application without reserve.
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