The man who garroted Frankie was one of the Rosato brothers. My understanding is the reason for the "Michael Corleone says hello" statement was so that Frank would believe that Michael had ordered a hit on him. And yes, Frankie does realize this. It was the reason he was going to testify aganist Michael.
What always confused me about Part II was why Frankie changed his story when his brother showed up. I could never figure out if his brother's presence alone intimitated him or he didn't want to be seen as a rat.
Both scenes have been discussed extensively. But I agree with SC that Rosato's intention was to kill Frankie, not scare him as evidenced by the cop's interruption. The line could have been ablibbed. We just don't know.
As far as Frankie's brother at the hearing goes, it was a warning to Frankie: testify and your brother is going down.
