Got an email rejection last week, for a story I'd sent to Bloodlust UK. I mention this because it was a really, really good rejection letter. It was both helpful and courteous, explaining clearly and concisely why the didn't feel the story was right for them, what they liked about it, and what they didn't like. In my long career as a literary nonentity, I've recieved many rejections and I would give this one an eight, maybe even a nine. I almost wrote back to tell the editior how impressed I was with the quality of the rejection, but felt that I risked being taken the wrong way.
To give you some idea of what I look for in a rejection letter, here's a few pointers:
If you haven't read the story, don't pretend that you have. Create a standard letter explaining why you can't read new stuff at the moment.
Do not stick the boot in. You can ruin someone's whole day quite effectively with a simple "thanks but no thanks." You do not need to use profanity.
"We didn't feel the story was strong enough" is a lame comment. Make up your mind what's wrong with the piece and say that, or use a standard letter.
Above all, don't give up! Sure, you'll take a few knocks along the way, but persevere. Someday you'll be able to write rejection letters like a pro!