If you are breking up with her, but still want to be on good terms and you still respect her, be honest about why you don't think it's right, and stay away from justifying it! For you, Brad, I'll say that again :) DO NOT JUSTIFY IT. Simply be clear about what you want. "I think you want this in a relationship, and I know I want that in a relationship, so it's best for us to part as friends and go find who we're meant to be with". (I don't care if you beleive in fate or not, Brad, say it JUST LIKE THAT...) No reasoning needs to be involved - this is 100% about what you want!
In situations that have deteriorated and a good outcome is impossible, I always liked John Malkovich's line in Dangerous Liasons: "It's beyond my control." <Repeat>
As with many things, it's less important how you do it and more important that you do it without dilly-dallying when you are clear that it's the right thing to do.