Your confidentiality agreement may not be executable if it doesn't allow you to work at any other company, competitor or not. It may require you to not divulge anything about the company - or even that you work there, or even that you can't work at a competitor. But to stipulate that you can't work anywhere else is a very broad restriction.

In essence, they are telling you that you can have no other means of income.

With regard to how you tell your boss - if you find that working for your former company is indeed a conflict of the confidentiality agreement you simply state that you are not able to due to the confidentiality agreement. If they push the issue further, just thank them for their interest and wish them well.

Tell him exactly what you stated in the paragraph above. Seem pretty cut and dried to me.

The same way you explained it here tell him asap so you can give him plenty of time to find someone else to do it

Just be polite and firm. Tell your boss your new employer does not allow you to work for another employer. If your current boss does not except it or gives you a hard time about it, walk away. You have a job waiting for you and there's nothing your current boss can do.

Grow a pair. He's about to be your ex boss anyways. Telling him about the confidentiality agreement would in fact be violating it. Just say that you would love to work for him but you can not because of your new job and that you are not at liberty to discuss further. than switch the topic to a personal good bye and throw in a we should keep in touch play golf sometime etc etc if you were close. if not just walk out after.