Keep in mind that his intentions are ultimately good and his secret isn't really all that awful, just something Sydney should know because of the Irina reasoning: Irina will allow them to marry despite the past she knows about and he doesn't seem to think Sydney will leave him when he tells her but just wants her to know his past..."just so there are no secrets between us".
Assuming he is an overall good guy, I believe there are 3 questions that must be answered:
1. Is Bill Vaughn Michael's father?
-> All evidence of their relationship as mentioned in the replies above indicates yes.
- This means that either Bill Vaughn wasn't his real name and was changed for some reason of protection or cover. Therefore Michael’s name would have been changed. Is there any other way to account for Michael Vaughn claiming that is not his real name but still having Bill Vaughn as a father? Unless Michael is some secret second son or something, the long lost Gaylord Vaughn who assumed his brother's identity!
2. Why does Michael claim that it was "no accident" that they met, that it was his office that Sydney was directed to that day and that he became her handler?
- The secret is "from a long time ago, before we met. Actually, it's the reason we met. It is no accident that I'm the one you came to when you walked into the CIA with your story about SD-6". Doesn't that seem like his secret has something to do with SD-6, like he was part of some secret taskforce and she was directed to him? That is, assuming his activities were in the best interest and somehow sanctioned by the CIA.
- If the CIA directed her to Michael, there must be some people there who know Michael's secret and/or were part of it. Michael could have been DSR and undercover (like Devlyn was), but given his reaction to Rambaldi and DSR activities in Season 3, I doubt it. So he is/was from A. a special branch of the CIA, B. another government agency, C. another foreign country's intelligence service (can we say France!), or D. some rogue group (could be good or bad, maybe at one point worked for SD6 as a triple agent, or remember 'The Trust'? They wasn't necessarily a group with evil interests).
-He couldn't have worked for Irina, at least with his own knowledge, because he denied his activities to her and was surprised she knew of them.
-If only some people would consider him a "bad guy", then, according to the possibilities above, A. Some people in the CIA don't like his job, perhaps he roots out moles and they feel threatened, B. Don't believe that he should have the mandate from another agency to work in the CIA, C. though he could be working for some 'greater good' and not against the US he isn't or wasn't primarily loyal to the US and therefore a 'bad guy', or D. personal interests in whatever group he was working for, and because they aren't sanctioned by the CIA (but not necessarily against) he would be considered "bad".
-Again, someone else in the CIA had to know because the director sent Sydney to Michael in the first episode.
3. Was the car crash an accident or intentional and related to his secret?
-I have no idea!
My deduction: Clearly the secret SD-6 related which ended when SD-6 was taken down, is sanctioned by some senior CIA officers who sent Sydney to him, and he is his father's son whose name had to be changed for protection or cover when Michael was young.
