Did you post a thread before Dave on your situation?
Normally I would say that if a woman says she still loves you but can only be your friend that means there's no hope. It's definitely possible to love someone and not want to be with them. However, I also think that if you break it off with someone you should keep the "I love you"'s to yourself as to prevent any mixed signals, which is clearly happening here.
Live as if you were to die tomorrow. Learn as if you were to live forever. - Mohandas Gandhi