I enjoyed my interview with you and found you to be a highly qualified candidate for the position of <available position>. It is for this reason that I wanted to inform you personally that we have selected another individual to fill that position. This is not in any way a reflection on your abilities or background; you seem to be an intelligent, skilled, motivated person who would fit perfectly into many companies. However, the chosen candidate’s <winner’s qualifications> simply fit better into what this company is looking for at this time.
Thank you very much for your time and graciousness. We will certainly keep your resume on file in case another appropriate position opens up. I wish you luck in your search, and wish you well in all things.