Questions in Etiquette

Wednesday night I went to the cafe across the street to grab a Coke and do some homework. I had a late (as in 11:30 pm) conference call with a colleague from work, and I needed some caffeine to help keep me awake.
While enjoying my coke I finished my homework and started on some personal writing. I wrote down a couple of little tidbits to share with you guys here on the blog, and I also wrote in a journal that I've started keeping since I've been here.

The bartender and a group of younger men were all crowded around the flat-screen t.v. by the bar, watching a football (soccer) game.

There was a group of older men sitting in the same area of the cafe, and they were having a riot. I could tell they were all old friends, and laughed out loud a couple of times at their antics.

I had been at the cafe slowly sipping my Coke for about an hour and a half when one of the older men approached me. He had just put on his coat and was ready to leave.

"You have a very beautiful smile."

"Oh, thanks, that's really nice. "

"Can I pay for your drink?"

"Oh, no that's okay!" (Thinking: Ha, I know better than to go down this road.)

"No, I insist."

"Um... okay." (If you insist...)

So, he goes to the counter and tells the uber-hot bartender he's paying for my drink. He comes back.

"Do you want a second Coke?" (Mine is all but gone.)

"No thank you, that's nice of you to offer, though."

"It's my pleasure. So, can I invite you to go out to dinner with me sometime?"

Um. NO. You're like fifty. I knew I shouldn't have let you pay for that drink. (He was, however, very well-mannered and very well-dressed. If he had been 15 years younger I would have said yes.)

"Oh, ummm. No, I don't think so."

"You're sure?"

"Yeah, I'm sure. Thank you anyway."

He was extremely gracious about my rejection (unlike kiwi-man). But he did stay and chat with some people right by the exit for like 40 minutes, so even though I was about ready to leave, I stayed cemented in place until he was gone.

So... now I pose the question.

Is it acceptable to allow someone to pay for your drink if you are CERTAIN you would never go out with them should they ask? Or is letting someone buy you a drink some kind of code for "Hey, I want your body," or "If you ask me out, I promise I'll say yes."?

After this experience I'm kind of leaning that way, but it's not like I have a whole ton of experience with this kind of stuff. Let's face it, I'm no club- or bar-hopping socialite, and when I go out at home I'm usually surrounded by friends, not chilling by myself, so there isn't really the opportunity for things like this to happen.

What do you guys think?

I think:
1) I need to learn how to say no. And stick with it. I always give in so I don't hurt someone's feelings, but then it always comes back to bite me.
2) It must be because of my aqua contacts.
3) I won't let anyone else buy me a drink unless I would be willing to let them take me out at least once.