Hmm...Is she going out with the other guy!?!? And you say 'I love you' as friends on a regular basis?
I don't know what to tell you on this one, other than that if she's going out with the other guy...why bother to ask? If she said no to him too however, she may just not want a boyfriend right now. Or, if they already broke up and you ask her now, she may just look at you as the rebound guy. But, if you really enjoy being her friend, and like the friendship you share, why chance that?
Never regret something from your past, everything happens for a reason.