Honesty for me.
Had two experiences of this, one a good way to handle it, one a bad way.
Good way, I met up with a guy with a bunch of others from a gay networking site to go clubbing one night, and we had a great night and hit it off, one thing led to another and yadda yadda...anyway, we had a few dates after that but I kinda knew the writing was on the wall as he'd mentioned that I was a bit too young for him a few times. I didn't really have any expectations as I was just having fun dating, then he went home overseas for a couple of weeks and the contact was fairly sporadic, which I expected it might be, but I thought that if he was really keen he would have made more effort. So when he got back I was due to see him and spoke to him on the phone beforehand and I mentioned that he didn't seem that keen and he said he was going to talk to me face to face but yes basically he just wanted to be friends so I said no problem - and it really wasn't (we've lost touch since but we did hang out for a while as just friends after that).
Bad way, I dated a guy for a few weeks who seemed really in to me, I was a little bit cagey as I wasn't sure if I was ready for a relationship at that point but just kinda went with it, after a couple of weeks of dating we were chatting on the phone and he said he had to tell me that he really liked me, and wasn't dating anyone else and wanted to keep seeing me, which was fine, we were having fun. Then a few weeks/dates later, when I was just starting to fall for him (and remember he was being more full-on with me than I was with him) he text me to say he couldn't see me that weekend as he had to do a last minute job out of town and we'd sort something out when he got back. Well, I didn't mind - that's life - but when he was back he was really cagey about meeting and I found it difficult to get hold of him, he wasn't replying to my messages and didn't answer when I phoned so I sent a final message saying I assumed he didn't want to keep seeing me and not to bother contacting me.
Then, a week or so later he started texting me again and trying to be all matey, like an idiot I played along and a few weeks later I was on a night out somewhere I knew he'd be and I bumped into him - with another guy. Cue much awkwardness and me exiting stage left as soon as seemed appropriate, and he sent me a message the following day to apologise for being out of it because he was high, and being all mate-y again. So I just replied to say I wasn't interested and to leave me alone.
So I think everyone should just be honest, if he'd said "Look, I like you as a person and friend but I don't think we've got a future as a couple" then I'd probably have been a little bummed about it but I'd have accepted it, moved on, and maybe we would have been friends. Because he was such a douche about the whole thing, that didn't happen.