Stored procedures are good because they can filter the records at the server level, but sub reports can kill response time.  It depends a lot of where the sub report is on the report.  Just remember that everytime the subreport is 'called' upon, it has to go out and fetch the data fresh.  Do you know if there are any optimizing tools for your database to make sure the stored procedure(s) are written for best performance?

I was not able to find the document.  My supervisor said she got the information from the author of books of Crystal Reports (George Peck).

I was looking through one of his books and found a couple of tips.  Improved performance can be had if a field that is being used is being indexed.  Also there is a option to set up what is known as bursting indexes (Report - Report Bursting Indexes).   Crystal can create it's own set of indexes to help speed up the report.

Just remember, each sub-report is like a whole report.  You will need to set up bursting indexes for each one of them.