Stored procedure is a small-program embedded in a DBMS, like SQL Server 7, Oracle, etc. With stored procedure, you could create business-method so you utilize advantage of client-server, especially thin-client/fat-server.
From programmer's stand point, stored procedure is just like ordinary procedure written in other language, but you use SQL language instead. Just like other programming languages, you call your stored procedure only with its name and parameters. The difference is the stored procedure is executed on server's memory space than client's.