Help me!
I'm sorry for the length that this story may be, but trust me, all information is necessary. So... lets start at the beginning of this predicament...
I liked this guy a lot, and I thought he liked me back. I told him that I liked him, he said, "I don't (feel the same way), I like the relationship we have as friends." I was sad, but whatever, I got over it. He and I repaired our friendship and slowly I got over my feelings of him. Before our friendship he was nothing... I'm just going to say it. I saw who he really was, and he was a really cool person and I liked him for that, but on the school "status" level, he was about a zero. I, on the other had was fairly popular (not that I really care about that, but it's important to include), so when I friended him he became more popular. I am not exactly one of the MOST popular people, but I'm not a nobody. He attracted the attention of many girls at our school. At first I was jealous, but because I was able to put my feelings aside, now I don't feel that way very much anymore. Before my friend got fairly popular and attracted so many people, he was a kind, sensitive, caring person. Now his ego is steadily growing---not that that's a completely bad thing since he use to have REALLY low self-esteem and I still think he does in the inside, but it's beginning to make him less of the person I saw in the beginning (the caring, nice guy). He now flirts with many other girls even though he knows ALL TOO WELL my previous feelings, and that whole incident was not too long ago. He tells me that my friends are mean, and says he is going to stop hanging out with/eating with us. Frankly, that doesn't seem like too bad of an idea to me since my friends HATE hanging out with him and many of the girls glare at me because I sit with him, and he is starting to annoy me. However, he says he has nowhere to go and keeps hanging out with us and following me around like a lost puppy. I am starting to get very irritated with him. I feel like he has taken, and not given anything to this friendship and used me as a crutch that he needed to lean on until he regained his self-confidence. If that's not enough, here's the worst part, my aforementioned "feelings" for him mean that whenever his self-confidence gets a little too low he flirts with me and my old hope of him liking me is reignited, meaning he can get an ego boost from that. I can't help it! I keep seeing the person he WAS and the person he COULD BE and not the person he IS. I feel as though he is using me to gain friendship and popularity and grow his ego, then ditching me and pulling away from his flirting when it gets too serious. It is a vicious circle, when he needs it he uses me to make himself feel better, then pulls away just long enough for me to rein back the feelings I have, then he uses me again. Why not ditch him you say? Why not ignore/ be mean to the guy? Because here's the trap I'm in: my parents are good friends with his parents and I have to see him EVERY OTHER WEEKEND because they like to have dinner parties with his family!! It would make things extremely awkward if I were to pull away and be mean even though I feel that he totally deserves it. Help me before I do something irrational or misguided! Is he just a poor, friendless misunderstood little dude who everyone seems to be in love with, or a cruel, intentionally malicious friend-user?

Sounds like you created a monster here. If you still want to be frriends and/or value his friendship then I think you should just tell him how he has been making you feel. Sometimes friends need to be put in their place. Tell him if he still wants to be friends he needs to treat you better and has to stop acting like a jerk otherwise you do not want to be his friend anymore. You choose who you want to be friends with.
You have already experienced how he treats you as a friend... I can't imagine him being a good boyfriend for you with the way he has been acting. So, consider that a blessing.
By the way, I commend you for cutting through the social stigma of finding a friend outside of your group of friends. You are a much bigger person than your glary-eyed friends. Ultimately, if this guy cannot just become a true friend then you should just hang out with people that are treat you better.

He is no different than any guy his age trying to fit in and have a fun life. That's on him, but for your part, you have to stand your ground and draw some lines with him as to his behavior with you that you don't like and just be honest about that. That's not being mean, just truthful. People only treat you the way you let them.

You are very preceptive. + 1 for you.

As for this guy, he's got a tinge of narcissism that will grow over time, just about every good looking guy has this. The best way to make a statement is not to feed into him and just ignore him. I realize you said this is impossible since your parents and his parents are chummy, but a little bit of awkwardness is better than any kind of stress.