"What do you think?" he said.

or

"What do you think?" He said.

And the same with ! marks. The first looks right to me but a friend thinks the second.

I would go for the 'he said'.

When checking this on the internet, I came across the following, which I thought was quite cute!
http://www.primaryresources.co.uk/english/powerpoints/Using_Speech_Marks.ppt#257,2,Slide


<Added>

Blab and Blob go for 'he said' too


<Added>

Blab and Blob go for 'he said' too

he said.

hoorah! That's fab thank you.

Even more fab that I am RIGHT

That's always the best!

Sorry about posting the children's teaching video. I thought it was quite sweet but realised it could be viewed as slightly patronising too! Then again, I learnt something from it (but won't say what )

LC for me, too - not that you need telling.

Agreed - always gratifying when it turns out you're right. One of the many, many grouses I have with Word's beastly auto-correct is that it doesn't know the rules for dialogue punctuation, so insists on correcting that one.

Emma