As far as I can tell, sed doesn't have a recursive mode. Here's a little script that uses perl to simulate a recursive sed:
#!/bin/bash
perl -e "s/$1/$2/g;" -pi $(find . -type f)
I put this in a file named ~/rsed
Then in my .bash_profile:
alias rsed="~/rsed"
Now I can use it like so:
rsed old new