Replies and Such
First, the formatting thing:
The only blank lines in your story will be where you expect linebreaks, and those will have a centered # in them, thusly:
"But why are you telling me all this?" Jane asked. She
passed a trembling hand across her brow.
Next morning, Paul awoke to find his refrigerator had gone
off in the middle of the night. Again.
As you can see, you indent the beginning of each paragraph (and each time a new character speaks, it's a new paragraph).
Let's try your example:
"Blah blah blah," he said.
"Blah blah blah," she replied. She then went on to do
something else that was interesting here.
Notice that you end the quoted words with punctuation, either a comma, an explanation point, a question mark, or something else. The comma stands for a period.
I will comment here that "said" is a totally invisible word, and far preferable to all the "said-bookism" synonyms you'll find out there: he bellowed, he shouted, he rasped, he gritted, he snarled, he yelled, he demurred, he apologized, he extemporized, he welded, he [some verb that is not said].
Now on the subject of plots and such:
Many years ago I studied magic. Back when I was six years old, one Halloween night, the firefighters had a Halloween party at the firehouse. I went with my parents. They had a magician! I decided rigth then that I was going to be a magician when I grew up.
I got pretty good at it, if I say so myself. I made money in high school putting on magic shows, doing kids parties and such. It was fun. (It's all the entertainment business!)
Along the way I ran into a book called <A HREF="http://used.addall.com/SuperRare/submitRare.cgi?author=bruce+elliott&title=magic+as+a+hobby&keyword=&isbn=&order=PRICE&ordering=ASC&dispCurr=USD&binding=Any+Binding&min=&max=&timeout=20&match=Y&StoreAbebooks=on&StoreAlibris=on&StoreAntiqbook=on&StoreBiblio=on&StoreBibliology=on&StoreBiblion=on&StoreBibliophile=on&StoreBibliopoly=on&StoreBooksandcollectibles=on&StoreChapitre=on&StoreElephantbooks=on&StoreHalf=on&StoreILAB=on&StoreMaremagnum=on&StorePowells=on&StoreStrandbooks=on" target="new">Magic As A Hobby</A> by Bruce Elliott. In there, I found a line that's stuck with me, that I've found to be absolutely true: "If you know a thousand ways of finding a selected card and only one way of revealing it, to the audience you only know one trick. If you know one way of finding a selected card and a thousand ways of revealing it, to the audience you know a thousand tricks."
I've shifted my focus over the years from magic to writing (a kind of magic all its own -- genuine thought transference!) but that lesson stuck with me.
Up above, I suggested using the plot of The Trojan Women, transported to Mesa, Arizona, in 1965. Suppose you wrote that book. Then suppose you put the plot of The Trojan Women into a novel set in feudal Japan. Then you did another novel with the plot of The Trojan Women, this one set in upper-class Westchester in 2003. Then you used The Trojan Women for a novel set among in the biker bars of Long Beach, California, in 1990.
To the readers those would be very different novels.
A bit upstream Karen commented that all novels are about relationships. I'll generalize that a bit: All novels are about people. Write about people, folks. The rest all follows.
From this you can further derive: You must become an expert on people. You have to learn to see through the eyes of others. You have to understand yourself very well, then you have to understand them.
Now, to reward you: <a href="http://www.sff.net/people/doylemacdonald/tricks1.htp" target="_new">A magic trick</a>.