Hi, I am thinking about using Sprites for my animated textures. I am making a 3D game, not a 2D one, so I was wondering if sprites hindered performance and if I should try a different technique instead? Thanks!
Everything you do has an impact on performance. The questions is, what do you compare it to.
If you want to have an animated texture you should use a spritesheet. You can probably do it on your own, but you should take a look at 2D Toolkit (aka TK2D) which lets you do this and tons of other 2D related stuff in Unity.
Since you mentioned you are doing a 3D game, you should note that if you go to any plugin route, you should pay some attention in selecting the right one for you, since some are more oriented to 2D games, while others provide 2D capabilities (such as sprite animation).
Animating spritesheet is a technique used by many if not most 2D games in Unity, so it is safe to say this will not be your performance downfall.