According to several articles, the sit-up is considered obsolete because it engages the hip flexors. Because of this, crunches are recommended and sit-ups are considered wasted effort. In reality however, the sit-up is actually superior to the crunch.
The reason for this is that the sit-up engages the muscles through a greater range of motion and you also involve the hip flexors. Working the hip flexors together with the abdominals is very effective. This is the way it occurs in almost all movements that involve the abdominals.
Both muscle groups must be involved: the hip flexors to stabilize the joint to allow for the movement to take place and the abdominal (mainly the rectus abdominis) muscles to execute the movement. Involvement of the hip flexors does not negate any action performed by the abdominals.
Perhaps even more importantly is that you use the lumbar spine as the axis of rotation in the sit-up. The crunch uses the thoracic spine as the axis for rotation. But, the main function of the abdominals is to flex the spine with the axis in the waist! When you constantly round the thoracic spine, you end up with a condition known as kyphosis (hunchback or rounded shoulders).
It should also be noted that you will not be able to do as many sit-ups because it is more taxing on the abdominals! The key in execution, however, is to not go beyond 45° of trunk flexion. Beyond this point involves mainly the hip flexors and the abdominals remain under isometric contraction.
Regardless of whether you do sit-ups or crunches, both exercises work only the upper abdominal muscles. For total abdominal development, you must do additional exercises such as the reverse trunk twist and the reverse sit-up. It should also be noted that all abdominal exercises involve the hip flexors — even the crunch!
See Biomechanics and Kinesiology of Exercise for more details on these and other abdominal exercises.