To whom did HaSh-m make this statement?
Ramban #1: He said it either to the celestial beings in general who stood before Him to serve Him, or to the angels who were currently doing His bidding (Refa'el and Gavri'el).
Ramban #2 : The speech here refers to thought; 1 He thought (or decided) to inform Avraham of what He was about to do, for the reasons that the Pasuk goes on to describe.
As we find in a number of places. See for example, Yeshayah 38:10.
What was HaSh-m's quandary?
Targum Yonasan, Rashi and Rashbam: It wasn't a quandary, it was a statement! He was saying that He could not possibly hide from Avraham what He was about to do to Sedom. Rashi explains how, having given him the land, including the five cities of Sedom, and having called him 'the father of a multitude of nations,' how could He destroy the children without informing their father? In a similar vein, the Rashbam points out how HaSh-m had given Avraham Eretz Yisrael, of which the five cities were part.
Why did HaSh-m see fit to divulge His plan to Avraham?
Seforno: He wanted to teach Avraham the principle of Teshuvah; that if there would be a number of Tzadikim in the town who might succeed in convincing the Resha'im to do Teshuvah, He would be willing to give them a chance (Tzedakah). 1 Otherwise, He would judge them (Mishpat). 2
Lev Eliyahu (Bereishis, p. 58): Because Avraham will command his children to do Tzedakah and Mishpat, 3 He should inform him, so he can teach them Derech HaSh-m, and do Tzedakah and Mishpat even with Resha'im. First he warns them; perhaps they will repent. HaSh-m is merciful and patient, even though their sin is very heavy. And they will know that a Tzadik must pray for Resha'im in his generation, like Avraham.
He would tilt the scales towards Chesed, because 'HaSh-m does not want the Resha'im to die.'(cf. Yechezkel 18:22; similarly, refer to 4:9:1:2; refer to 6:6:1:2).
Mishnas R. Aharon (Vol. 1 p. 20, Hagahah): After all the tests, Avraham had special dearness only because he will command his children, i.e. Zikuy ha'Rabim. This is the ultimate love. Only through this one merits the world to come. Without it, he receives the world to come only through Chesed HaSh-m. Lev Eliyahu (Bereishis p. 55) - Commanding his children also overrode the thousands and multitudes that he brought to know and serve HaSh-m. The Akeidah was so difficult, for through it he would lose this dearness!
Why does it say, "and HaSh-m"?
Moshav Zekenim #1: This connects to the end of the previous verse. Because Avraham accompanied his guests and spoke Torah with them, the Shechinah rested on him.
Moshav Zekenim #2: This teaches that Avraham left the Shechinah in order to escort. We learn from here that we leave the Beis ha'Keneses or Beis Midrash to escort a guest, for it is Piku'ach Nefesh.
