Libby is the one he feels the most guilty for. (and thank goodness for that, I hope to never see Michelle Rodriguez on LOsT again)
He planned on killing Ana Lucia, he had time to prepare himself for it.
But Libby surprised him.
If you watch the scene again you can see it in Michael's face.

When he shoots Ana Lucia he is cold and focused. He is sorry for what he is about to do but he has made up his mind to do it.

Then Libby comes in and his facial expression changes. He is of course shocked and surprised, but also horrified at what he just did.

Anyways thats my two cents.

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Doctor playing golf. Woo, boy howdy, now I've heard everything. What's next, cop eating a donut?