I do know how to read music, because i had learned clasical guitar for year, before i went electric.
I think that it is important to know how to read music, as much as it is important to learn scales and chords.
Does it kill the creativity?
I dont know.... When im playing lead in my band i never ever use written things, i improvise every thing i can, because im too lazy to write things, and as a "blues player" i think its more "cool" to improvise.
However there are things which cannot be improvised, like clasical pieces and jazz standarts. Those things should be played from the charts, and thus if you play either jazz or clasical music you must learn sight reading.