Being a consultant for several years, I moved around a lot. THe Dear John was never an easy conversation to begin, especially if my skills were especially essential to whatever major project happened to be the flavor of the month. Usually though I would tend to inform all concerned parties at once in an impromptu meeting in the middle of the day. Usually the conversation would begin in a benign way, almost as if I might be asking for more responsibility or a raise. "I'm really enjoying my time here, but I have thought for a while I could take on more... unfortunately..."

That usually worked for me.

Update:
I received the offer last night. As background, I filled out a nice questionaire prior to the interview. This detailed salary requirements, among other things. I made a mistake in my salary declaration, forgetting about an annual increase that I just received in the fall. The difference was ~6%.

Through an e-mail exchange, I get the typical negotiations: generally worded e-mail to a small group of candidates; shortened timeframe due to client travel; highlighted note to myself specifically. Basically the note said that whomever received this e-mail made the cut for such and such a reason. The note to me specified a lean in my direction (of course) as long as the salary thing could be discussed. An then there was the I am going out of town bit, make a decision.

Of course, this is the stop sign.

I responded that I was interested in continuing the discussion. That lead to the revelation that the CFO-certified amount secured for the recruitment was below my salary requirements; close but not enough. Although, the additional funds had been secured through the CFO, pending my approval. The thread continued on to state that any additional funding would be difficult to obtain.

That's all fine and well. Only, I tend to be an asshole about specifics. The amount specified in the offer as salary, remember, I filled out a form that detailed my requested salary, was $3k lower than what I had asked for in the questionaire. Not only that, the e-mail specifically stated that the lower number was what I had asked for, and that great steps had been taken to obtain the additional funds because they were betond the original funding allocated to recruitment. I could accept this offer and have a formal letter in my inbox by the morning.

So, there are two possible outcomes here: 1.) an honest mistake has been made and the amount asked for in my questionaire has been misread; 2.) my future employer is trying to squeeze $3k out of me from the start.

My response included this:
I appreciate your transparency in the process. I went back and checked my original answers in the mini-interview regarding salary. I did indicate that I was currently at XXk. That actually is an error on my part. I found the scope of questions refreshing and in my glee, forgot that I did receive a merit increase this past fall which brought me up to XX+k (a number that I had asked for in the interview). My bad.

Honestly, I do not wish to get into a chicken-race over this. The two numbers could be split, which takes it back to XXk (what was specified in the questionaire). The offer letter could include a salary projection, based entirely on merit, or you could stick with XX-k (original offer).

I have yet to hear a response.

I had a similar experience with my current position. When discussing salary I did a quick computation in my head, transferring my hourly rate to an annual compensation. This was eventually accepted after much discussion and the revelation that my asking price was ten thousand dollars above the procurred amount of salary by the department manager. Blah Blah Blah, the VP approved the increase in budget and everything was kosher. Only problem being I made an error in computation and was actually coming in at roughly 2K less than my previous position (I really did pass remeidal math... not spelling, but math I was spot on). Long story short I simply ate the loss, though it was more symbolic than anything as I moved from a consulting position sans any benefits to a fully benefitted full time position.

Update 2:
I'm in. The salary negotiations put the employer in a tight spot. He caved. I dropped the bomb this afternoon. And now…I. Drink. Beer.

Congrats! Now you'll have new material to entertain us with :)