Cristina, my feeling is that Fredo had to know, even if it was subconsciously, that his deal with Roth was going to mean some harm to Michael. Even if he didn't want to admit it to himself, he had grown up in that world. He knew what treachery was. He had witnessed his father's attempted murder. He KNEW, even if he didn't know. You know??

As for his feelings of guilt, I'm sure Fredo had them. Even Michael was capable of guilt and regret. But that doesn't mean he didn't put the family in danger and need to be eliminated.