What is the best way to turn down a Postdoc offer?
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.