Blame chemistry, not him.
Let the good guy know you really wish there was a spark between you two, but you just don't feel it. Make sure he knows he didn't do anything wrong to cause you to not be attracted to him. Emphasize that you just don't fit together.
Dump him face-to-face.
He is a good guy, not a pyscho stalker. Treat him with respect and absolutely avoid break-up emails or notes. The phone is a possible back-up, if distance is a problem.
Pick the most boring day possible.
Avoid holidays or birthdays, his parents' anniversary, or the days after or before a wonderful or traumatic event. He won't feel as dumped if he doesn't have to associate the break-up with anything else in his life.
Allow him to talk after you have explained your feelings.
Don't give in or feel pressured to give this nice guy another chance, but let him know you are decent enough to care about his opinion.
He doesn't need mixed signals like kisses or extra affection. Leading him on so that he's not as hurt will only hurt him more in the long run.