- Briefly - the reasons are not necessary to share in great detail
- Politely - never burn a bridge
Something like "Thank you for the opportunity to interview with your company, scheduled for (whatever date). However, I have recently taken a position with another company, and so must cancel our scheduled interview and withdraw from consideration. Again, thank you for the opportunity."
An e-mail is all that is typically warranted unless you have a close relationship with the recruiter/hiring manager or you are very far into the interview process and want to be ultra-polite. However, even if you do speak in person, there is no need to go into greater detail. If you do, you are setting yourself up for even more discomfort if the other company tries to immediately counteroffer or something of that nature.