What is the best way to turn down a prospective job offer without offending the interviewers?

As long as you are polite, don't worry about offending the interviewers.  They just work in the company. Just say that you'd don't want the job and the reasons why.  You aren't the only person they are interviewing, so what they'll just do is to cross your name off the list, and call up the next person. Depending on the corporate politics, they might be delighted that you turned down the job.  If they can't hire people because the salaries are too low, for example, you've just given the interviews ammunition to have upper management give everyone a raise. I've also found that interviewers don't care if you turn down a job.  *Recruiters* care a lot more since they get paid if you accept the job.  One of the more uncomfortable conversations I've had was with a recruiter that was using every trick in the book to try to get me to accept a job that I in the end didn't want.

The other answers are spot on. You didn’t mention how your were going to turn down the job. I recommend against using email and suggest that you do it over the phone. You may not have a choice to use email but by calling and speaking with the interviewer/recruiter or whomever, you can show your sincerity and appreciation for their time and set the expectation that even though things are not lining up now, that sometime in the future, if YOUR situation changes, would it be OK if you reached back out to them? This keeps you from potentially burning bridges and may give you time to pursue more interesting positions. I always advocate to not burn bridges if possible and to make an opening for yourself later.If the interviewer is different than the recruiter, try to get their direct contact information so you can side step the recruiter later on since you are now connected. It also helps to use LinkedIn to connect and maintain future contact.The truth is that many of the recruiting functions have been outsourced and the recruiters do not get paid unless they fill the slot. Expect a lot of pressure tactics but be firm, polite, and respectful.