I have used both but what I am not clear is when I should prefer one over the other. I mean I know stored procedure can take in parameters...but really we can still perform
A View is just like a single saved query statement, it cannot contain complex logic or multiple statements (beyond the use of union etc). For anything complex or customizable via parameters you would choose stored procedures which allow much greater flexibility.
It's common to use a combination of Views and Stored Procedures in a database architecture, and perhaps for very different reasons. Sometimes it's to achieve backward compatibility in sprocs when schema is re-engineered, sometimes to make the data more manipulatable compared with the way it's stored natively in tables (de-normalized views).
Heavy use of Views can degrade performance as it's more difficult for SQL Server to optimize these queries. However it is possible to use indexed-views which can actually enhance performance when working with joins in the same way as indexed-tables. There are much tighter restrictions on the allowed syntax when implementing indexed-views and a lot of subtleties in actually getting them working depending on the edition of SQL Server.
Think of Views as being more like tables than stored procedures.
I correlate the use of stored procedures to the need for sending/receiving transactions to and from the database. That is, whenever I need to send data to my database, I use a stored procedure. The same is true when I want to update data or query the database for information to be used in my application.
Database views are great to use when you want to provide a subset of fields from a given table, allow your MS Access users to view the data without risk of modifying it and to ensure your reports are going to generate the anticpated results.
The advantage of views is that they can be treated just like tables. You can use WHERE to get filtered data from them, JOIN into them, et cetera. You can even INSERT data into them if they're simple enough. Views also allow you to index their results, unlike stored procedures.
The main advantage of stored procedures is that they allow you to incorporate logic (scripting). This logic may be as simple as an IF/ELSE or more complex such as DO WHILE loops, SWITCH/CASE.
Views are useful if there is a certain combination of tables, or a subset of data you consistently want to query, for example, an user joined with its permissions. Views should in fact be treated as tables.
Stored procedures are pieces of sql code that are 'compiled', as it where, to run more optimally than a random other query. The execution plan of sql code in a stored procedure is already built, so execution runs slightly smoother than that of an ordinary sql statement.
Well, I'd use stored proc for encapsulation of code and control permissions better.
A view is not really encapsulation: it's a macro that expands. If you start joining views pretty soon you'll have some horrendous queries. Yes they can be JOINed but they shouldn't..
Saying that, views are a tool that have their place (indexed views for example) like stored procs.