From the book's influence on me, and the subtle hints in the film, I definitely think that Vito wanted Sonny as the new don. Not the bad tempered and impulsive Santino Corleone that we all know, but a new one that would learn and eventually learn to peacefully progress through with the family business, and maybe even eventually bring it to a close and move into legitimacy.

In Michael, Vito saw a new hope for the family. He saw that Michael was completely independent and he might be the first to successfully escape the web of crime. Unfortunately for Michael, he kept getting drawn in by all of the minor circumstances.