Well, I think the correct pronunciation is Var-TAN (as in the sound in the word rendezvous), because that's how it's pronounced in France (and Michael IS FRENCH, and his whole family pronounces it that way). However, here in the U.S., Michael himself pronounces his name as Var-TAN (as in the color). So, I think both pronunciations are correct, but it is wrong to say it like VAR-tin.
Anyway, I do know MV appreciates it said correctly, because I have heard him say in interviews "thank you for saying my name right" whenever they use the Var-TAN pronunciation.
ETA: If any of you have the Alias DVDs, you can listen to Michael introduce himself in the audio commentaries. The way he says his name would be the correct way to pronounce Vartan.