1. Datasets are disconnected data types in ado.net that means they store the whole data which you require in an offline mode ie they can be important only when you want to close existing connection and take the datastore to some other place.There are few applications which have that sort of demands.
2. Datasets are a little overburden on memory as they keep whole thing inside memory.
3. Another benifit of using datasets is their easy conversion to XML format
4. Generic collections or collections cannot be directly used first you have to fetch data either by using Data Reader or Data Sets or any other medium and then you can make a generic list or collection of fetched data.
5. Linq to sql is also a very important way of tackling such problems where in you can directly query from your application and fetch results in Generic Collections.There are many other advantages of Linq
6. You can have a look at this article for further information .
   
7. http://smallworkarounds.blogspot.com/2008/09/custom-functions-recieving.html
   

storedprocedure is the best significant way to store the database...