"I need to be honest with you. I enjoyed having you here and you're fun to be with, but I don't think this is going to work as a boyfriend kinda relationship. I do like you, and if you wish to remain as a friend I understand and am willing to do that, I just odn't think I feel the same spark that you do when we're together. I didn't know what to say. I don't want to hurt you, even though I know this is. But I didn't want to keep going and give you false ideas anymore."
EDIT: Well, after a talk with him, we're on good terms now. We're still not a couple, but as far as I'm concerned, he's too nice of a guy to tell him to fuck off. I can at least appreciate the fact that he was courteous enough to say that it just 'wasn't there', so to speak, early on rather than dragging things out and leading me on like a lot of guys would do.
On the bright side, I was talking with my mom last night and she basically implied that I'd be getting the majority of my gift(s) on Friday, her explanation being that "sometimes expensive stuff takes time to arrive." So, uh... yay... I think?