What are the pros and cons to keeping SQL in Stored Procs versus Code

What are the advantages/disadvantages of keeping SQL in your C# source code or in Stored Procs? I've been discussing this with a friend on an open source project that we're working on (C# ASP.NET Forum). At the moment, most of the database access is done by building the SQL inline in C# and calling to the SQL Server DB. So I'm trying to establish which, for this particular project, would be best.

Java MyBatis stored procedure call with OUT parameters

First question: I am trying to return one OUT parameter and not a result set with annotations. First, is it even possible? If it is, how would one do this?