Must I do it in person? I'm so not the confrontational type and I already feel guilty enough... :-(

Unless you have signed papers or a contract, there is nothing that really ties you to the new offer. Supervisors are used to students accepting their offers then never showing up, you won't be the first nor the last to do so. What you need to evaluate are the pros and cons of staying in your current PhD. Would you have to start anew/from scratch with the alternative option? Is the alternative PhD something you REALLY want? You don't want to start a new PhD then find yourself stuck in something you also don't enjoy.

I started my PhD in science about 11 months ago mainly because I didn't have a specific plan for what I wanted to do with my life after my Masters. A month into it, however, I got a call from one of the companies I had wanted to work with (I lost hope after not hearing from them for 3 months) and I embarked on a lengthy recruitment process which is still ongoing.
My situation is complicated by the fact that my supervisor is a really nice guy. He took me in despite crap grades in my first year of undergrad and lack of publications from my masters, and is now paying me from his own research funds (in Canada, it is extremely difficult to receive scolarships/funds without having published). On the other hand, the project I was given was very ill thought of and quite vague. I've tried to find a tangent to work on with limited success and absolutely no encouragement/support from my supervisor. He isn't pleased with the fact that I've diverged from the topic he wanted me to work on, but I have absolutely no motivation to go back to it, especially that I very strongly feel it's somewhat of a dead end.
I have started hating the lab and the very obvious lack of support (for instance, my supervisor will ask the other PhD student to attend conferences and prepare posters/presentations, but not once has he asked me) and I have to drag myself to work every day.

Right now I am fairly certain that I will be getting a job offer from the company some time soon. The pay is excellent, advancement prospects are even better. I will know their answer in September for a start date in November.
My guilt is eating me up though. I guilt-trip myself over quitting my PhD and how my supervisor would take it. I feel like I wasted almost a year of funds that could have gone to a more worthy student, but I just couldn't quit without at least having a solid prospect to move onto.

When should I tell him? How should I tell him?