Re: Long Distance..
Because you are not aiming for a long distance relationship, the normal advice of talk often will not come into play. However, you should still aim to keep things fresh and upbeat.
I would agree though that to lead her on is a foolish idea. Just be honest with her and tell her that you are not looking for a relationship. If she wants friends with benefits than make it friends with benefits. Because you are aiming to decrease attraction rather than increase it, there may be a chance that it just drops off all together. I doubt that this is likely, considering that if you are honest with her, she will only respect you more for it.
"There is no better than adversity. Every defeat, every heartbreak, every loss, contains its own seed, its own lesson on how to improve your performance the next time." - Malcolm X