I generally write OO code. I suspect that most of you probably do, too. In that context, it seems obvious to me that all of the business logic - including SQL queries - belongs in the class definitions. Splitting up the logic such that part of it resides in the object model and part is in the database is no better than putting business logic into the user interface.
Much has been said in earlier answers about the security benefits of stored procs. These fall into two broad categories:
1) Restricting direct access to the data. This definitely is important in some cases and, when you encounter one, then stored procs are pretty much your only option. In my experience, such cases are the exception rather than the rule, however.
2) SQL injection/parametrized queries. This objection is a red herring. Inline SQL - even dynamically-generated inline SQL - can be just as fully parametrized as any stored proc and it can be done just as easily in any modern language worth its salt. There is no advantage either way here. ("Lazy developers might not bother with using parameters" is not a valid objection. If you have developers on your team who prefer to just concatenate user data into their SQL instead of using parameters, you first try to educate them, then you fire them if that doesn't work, just like you would with developers who have any other bad, demonstrably detrimental habit.)
