Oh, I think there's been some character development, but not all of it is the "perfect boyfriend" variety, although that's how he usually presents himself to Sydney--we only seem to see him ruffle to her when she suggests flaws in that presentation. As far as Jack is concerned, it's a very different story. He's been very confrontational toward Jack, quick to point out his moral failings. Vaughn seems to see himself as a highly moral person, yet he's waffled as far as committing to the woman he loves, instead continuing to date his former girlfriend (that he told Sydney he'd broken up with) behind her back. I sense that he fears getting involved in a situation so complicated--loving a woman that brings up so much of his personal baggage (her mother killed his father; he may have significant issues with her father--and who knows? There may be something about Jack in Vaughn's father's diary.). He's pushed Jack to come clean with Sydney, telling him that Jack has betrayed her trust and that he, Vaughn, will not--yet he turns around and does just that, investigating Irina behind her back when he knows that Sydney would want to know about it (not to mention the not telling her about Jack's problems with Kane and his dating Alice). And he steadfastly refuses to open up and discuss Sydney's mother with Sydney, something that they need to face together if they are to form a lasting union.
This is not to say that I dislike Vaughn! He has many good qualities, as well. He's been very devoted to Sydney and backed her up even against CIA orders, and he's a company man. He's attempted to support Sydney's decisions regarding her mother despite his personal problems with Irina. He truly loves Sydney, something that Jack sees as an asset--for we see that he values and uses it to help ensure Sydney's protection despite his own friction with Vaughn.
What we've mostly seen is the "perfect boyfriend," supportive Vaughn, with some action/spy Vaughn, but there have been rather pointed hints that he can be very sneaky as well (I'm thinking Jack was much more open--to his sorrow--with Laura than Vaughn is with Sydney). He's human, not perfect (sorry, girls!). I'm looking forward to see his character developed further.
As far as "spark," I haven't seen a whole lot of that--I've seen a lot more from Jack, who has a very passionate nature concealed under his mask. But it's hard to be a spark plug when you're mostly being supportive.
Wow, this was long. Sorry about that.