You could always just reject gently any shows of affection and tell him how important he is to you as a friend, without saying the truth with just a crude "I don't like you" (still can't figure which sentence hurts them more, tho...).

This doesn't always work, actually. I tried this "method" when my best friend (which has a big background involving me) started saying "I love you" to me and stared at me with dreamy eyes. I didn't like him at all like that when he fist confessed to me but, hell, now I'm stuck with him again. And loving it.

Try helping him with his attitude issues, and DO NOT settle with him if you don't really like him. Settling with someone just because of your fear to loneliness isn't gonna make you feel any better, trust me. Atractiveness isn't something you should worry about, either. Just be yourself and wait for the right guy, there's a hell of a lot of people out there.

I hope my advice helped you someway, and don't feel bad if things get bad, sometimes life goes poop but whatever. No need to cry about it.
<i>sigh</i> I feel like a teenager after writing so much in a "my-friend-loves-me-what-should-i-do" thread. Fuck it, I'm gonna watch some pr0n now.