Is there a performance gain by handling data with stored procedures versus feeding it into functions after retrieval?
It depends a lot on what you're doing with the records, and what your network architecture looks like. For example, if the stored procedure is going to reduce the overall amount of data transmitted from MySQL to PHP, and you have a relatively slow link between the PHP instance and the database, a SP could certainly help you.

I would recommend you start with some of the 'heavier' manipulations you do to your data on the PHP side, see what you can write as a SP, and then benchmark it.