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. In fact, you will not be able to do as many sit-ups because it is more taxing on the abdominals! Perhaps even more importantly is that the crunch uses the thoracic spine as the axis for rotation rather than the lumbar. But, the main function of the abs 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 hunchback.
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!
See Kinesiology of Exercise for more details on these and other abdominal exercises.