Some useful questions to ask an SEO include:
- Can you show me examples of your previous work and share some success stories?
- Do you follow the Google Webmaster Guidelines?
- Do you offer any online marketing services or advice to complement your organic search business?
- What kind of results do you expect to see, and in what timeframe?
- How do you measure your success?
- Whats your experience in my industry?
- Whats your experience in my country/city?
- Whats your experience developing international sites?
- What are your most important SEO techniques?How long have you been in business?
- How can I expect to communicate with you?
- Will you share with me all the changes you make to my site, and provide detailed information about your recommendations and the reasoning behind them?
via Search Engine Optimization SEO – Webmaster Tools Help.
They also link to a news story about how a rogue SEO got caught by the FTC. You can learn more about SEO at http://www.noblesamurai.com/ or if you like working with spreadsheets take a look at simplewebmethodology.com