What is the best way to turn down a Postdoc offer? I've been recently offered a couple of Postdoc positions, and I was wondering how you as professors would prefer to be informed if a candidate would rather work with another institution.

I know we are professionals, and these things are to be expected, and probably the professor has another candidates to choose from, but I just want to be as respectful and professional myself as possible, so how would you turn down an offer, or would like to be turned down.
Keep it short and honest. 

For example, 


  Dear So and So, thank you for your offer for a postdoc at Blah. It's
  an attractive offer, but I've decided to take a position at Foo-Bar
  instead. The work you're doing over at Blah is very interesting and I
  look forward to interacting with you in the future.


Of course if you have more than one rejection to send out PLEASE PLEASE don't do it generically. Tailor it to each place individually. It takes a little more time, but it's a fair exchange given that they took the time to give you an offer.