He talks about Nicky not returning his calls and being mean to him in certain instances, but these strike me as very insufficient reasons for setting up your friend of 30 years to get whacked.
It's a good question, and I love this movie for not shoving it down our throats. I think Mikey was just there to finger Nicky, and the reasons for that seemed clear to me. Nicky doesn't care about people, doesn't respect people. Like he says himself, he likes to show off. He's easy to like for his charm, but he's a terrible person. Great casting, in my opinion. Cassavetes was perfect as a man who could treat people like *beep* and still have their respect, if only because he's so charming. I think maybe Mikey really did want Nicky to get out of town and be safe, but he's just a schmuck.
He's in the mob, it's a kill or be killed situation. Has anyone seen the Sopranos? it's pretty clear what would have happend to Mikey if he didn't finger Nicky. The best part of this film was that part way through the film you can tell Mikey has doubts and wants to help Nicky, but when Nicky pulls that stunt with Nell it's kinda the straw that broke the camels back and Mikey just doesn't care anymore.
I noticed that Mikey looked as if seem distracted in the bar. Later we learn he was eyeing the clock, waiting for Kinney. Mikey was just a friendly face, sent to keep Nicky company on his last night on earth.