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Did whoever told you that provide some authoritive proof that that is Microsoft's own best practice ?

I'm sure it was there best practice a few years ago, but every indication from them over the last few years (for example from their recent sample code) leads me to believe that their position has shifted.
This was on a slide in an official training course for programming SQL Server 2000, a course that was just updated by M$ within the last three months. And they take these slides pretty seriously- I asked if I could get a copy and the instructor said M$ won't give them out.

Also, I'd say the inclusion of the CLR in 2005 and the ability to make 2005 a HTTP listener also support this claim (though the inclusion of those features is certainly not definitive).

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One interesting thing to note is that with SQL Server 2005 you can use C#, VB.NET and other .NET managed code instead of T-SQL for stored procedures. I haven't used it yet, so I have no idea how well it performs.
Apparently, it's not good for raw data access, as it has to go through ADO.NET, however it is much faster for computational logic. I think it's a pretty cool option, though, and will at least let us leverage common utilities between the front and back end.

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Of course using managed code stored proceedures is the perfect way to lock yourselves into Microsoft's database forever...
Yeah, I think if I were a DBA I'd not want assemblies anywhere near my database. Of course, we don't have a DBA and programmers (for whatever reason) don't seem to think of such things.

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And for the record, no the database is typically not the right place for business logic.
Thanks for wheighing in . . .
_________________________
-Jeff
Rome did not create a great empire by having meetings; they did it by killing all those who opposed them.