How to say 'no' really REALLY gently?

I've had this happen time and time again you have to say to her. or him in my case - i really value you as a friend and all that but i dont want to ruin our friendship by dating. And whatever you do once you've said no try to keep your distance a bit so as to not lead her on. us girls get really over sensitive over these things. i've been in both of your positions its a hard thing to do or hear.