Where does the @Transactional annotation belong?

Should you place the @Transactional in the DAO classes and/or their methods or is it better to annotate the Service classes that are using the DAO objects? Or does it make sense to annotate both layers?

I think transactions belong on the service layer. It's the one that knows about units of work and use cases. It's the right answer if you have several DAOs injected into a service that need to work together in a single transaction.