In response to the OP, I'd say not to assume that every stranger approaching you is automatically hitting on you, and it presents you in a positive light if you are friendly with a stranger. The time to cut of the interaction or make the rejection is when the guy makes his intentions known, or when you sense you are just "being hollered" at.
I say no worries about "leading the guy on" because it's the guy's own fault for not being direct.
Last week I approached a girl who was a total stranger. Right off the bat, I told her I thought she was cute, and that I had to meet her. We had a great conversation for 2 minutes about the book she was reading, and when I invited her to join me for coffee sometime she told me she had a boyfriend but would be open to just hanging out, and gave me her number. I was totally cool with that, because I do have a lot of female friends.
Another time, I approached another stranger and told her immediately I thought she was cute. After barely getting a conversation started, I was interrupted by my 90-minute meeting starting. When the meeting was over, I went back to her, and she told me she had a boyfriend. And I was cool with that as well.
What I'm saying is that it's totally cool to just be friendly and chat for a little bit, and then reject the guy if he asks you out, or casually throw it into the conversation that you have a bf if it's been about 2-5 minutes. Even then, if the guy has been completely indirect, I don't think you're obligated to reject him or let him know of your status if he hasn't let his intentions be known.