Functions in postgres

Hey all, here's a question that I think can be easily answered by those
of you with more experience than I.  What are the
advantages/disadvantages of using a function with postgres as opposed to
putting all of the SQL in an external file (a web page for example)?
 The only advantages that I can see is that if you want to isolate an
entire process or want to associate a trigger with it, you can.  Also, I
suppose it could cut down on a bit of network traffic by sending only
the needed variables rather than the entire query.  Aside from this
however, does it offer any kind of performance increase (ie stored query
plan, pre-compiled, etc)?  Thanks for the insite

Kris