Danny wasn't prepared at all this time. He was back to worshipping Michelle and opening himself up to her. He was also probably whiplashing himself for having believed his mother over his wife, for what he thought was his own betrayal. Poor Michelle couldn't have picked up a worse moment to confess, in my opinion, but I believe she got too caught up in that suspended moment of the dance (when they got closer to each other like never before, when there was that brief union of the souls - someone described that dance for me last night and it sounded like a lovemaking dance to my ears) to fully realize the impact it would have on Danny.

I think we'll get to see a lot of what you expected from Danny in the coming weeks, after the shock has had time to wear off. Actually, the spoilers seem to indicate that he understands where she was coming from, why she'd called the F.B.I., otherwise why would he offer her the greatest gift possible? From his point of view of Michelle's situation, of course, he doesn't know she wants to stay married, have another chance, all he knows is that she felt trapped enough to betray him in that way. And he's offering her (probably) a one-way out ticket, and it's not death this time.

kristi