There's a few things going on here:

1) Roth wished to eliminate Michael, as evidenced by the hit attempt in Michael's home.
2) Roth also sought to eliminate Pentangeli, who was giving his boys, the Rosatos, problems.
3) What Roth "played beautifully", I think, was the "owning" of Questadt, and the revision of both his original plans as mentioned above, into a new plan, dictated by the circumstances (Cicci & Pentangeli in custody), to eliminate both Michael and Pentangeli, albeit through prison rather than death.
4) The "Michael Corleone says hello" line makes no sense in the context of the script. Since Pentangeli was supposed to wind up dead, what difference would it make if he know that Michael was behind his killing?
5) Like SC, I have heard that Danny Aiello ad libbed the line, and I like Don Andolini's theory that perhaps Aiello was somewhat confused by the script. He had a very small role, so it's understandable if he did not grasp all of the script's nuances. Maybe Coppola left it in, though, because it fit well as a reason for Pentangeli's subsequent cooperation with the Senate Committee.

One thing that bothers me here, though, is this:

If it was Roth who ordered the hit on Pentangeli--and Roth admits as much in his "This is the business that we've chosen" speech--how could he have possiblty thought that Michael wouldn't figure this out? Michael knew that he didn't give the order, so there weren't too many possibilities left.