FROM all eternity God decreed all that should happen in time, and this He did freely and unalterably, consulting only His own wise and holy will. Yet in so doing He does not become in any sense the author of sin, nor does He share responsibility for sin with sinners. Neither, by reason of His decree, is the will of any creature whom He has made violated; nor is the free working of second causes put aside; rather is it established. In all these matters the divine wisdom appears, as also does God's power and faithfulness in effecting that which He has purposed. (1689 London Baptist Confession, 3.1)
Thus says the confession to which I and my church hold. What this is saying is that God ordains future events in such a way that our freedom and the working of secondary causes (e.g., laws of nature, free choice) are preserved. Theologians call this “concurrence.” God’s sovereign will flows concurrently with our free choices in such a way that our free choices always result in the carrying out of God’s will (by 'free choices' I mean that our choices are not coerced by outside influences).
I thought that it would be good to illustrate my view by way of example, and not just talking about it in theory.
Consider for a moment the Crucifixion of our Lord.
Notice how the Apostles talk about this event in their prayer to God:
Indeed Herod and Pontius Pilate met together with the Gentiles and the people of Israel in this city to conspire against your holy servant Jesus, whom you anointed. They did what your power and will had decided beforehand should happen. (Acts 4:27-28 NIV)
And again in the Pentecost Sermon:
This man was handed over to you by God’s deliberate plan and foreknowledge; and you, with the help of wicked men, put him to death by nailing him to the cross. (Acts 2:23 NIV)
Jesus is described as "the Lamb who was slain from the creation of the world." (Revelation 13:8 NIV)
So with that in mind consider this:
Now it was the day of Preparation, and the next day was to be a special Sabbath. Because the Jewish leaders did not want the bodies left on the crosses during the Sabbath, they asked Pilate to have the legs broken and the bodies taken down. The soldiers therefore came and broke the legs of the first man who had been crucified with Jesus, and then those of the other. But when they came to Jesus and found that he was already dead, they did not break his legs. Instead, one of the soldiers pierced Jesus’ side with a spear, bringing a sudden flow of blood and water. The man who saw it has given testimony, and his testimony is true. He knows that he tells the truth, and he testifies so that you also may believe. These things happened so that the scripture would be fulfilled: “Not one of his bones will be broken,” and, as another scripture says, “They will look on the one they have pierced.” (John 19:31-37 NIV)
The question then is raised:
Were the soldiers acting upon their voluntary decision? Was it their own "free will" choice to not break Jesus legs? Yes to both. It was their free, non-compulsory choice to not break Jesus bones. They were not forced to do it. It was a decision that they made freely to not break his bones.
At the exact same time, in Exodus 12:46; Numbers 9:12; Psalm 34:20 God foretold that not one of Jesus bones would be broken. Indeed, as it says in Acts, Jesus legs not being broken was "by God’s deliberate plan and foreknowledge". Indeed this was something that God's "will had decided beforehand should happen." While the soldiers did not break his bones because of their own free choice, while they were not forced or compelled to do so save by their own desires, they were at the same time, fulfilling God's prearranged plan.
Put simply, it was God's prearranged plan that not one of his bones would be broken. God also planned the free choice actions of the soldiers involved. At the same time the soldiers acted freely, because of their own choice, and not because they were forced from without or under any compulsion. Both ideas are equally true and we should not sacrifice one for the other but hold onto both.
This is more then just God "foreseeing" the future. The phrases that say that this event took place "by God’s deliberate plan and foreknowledge" and that God's "will had decided beforehand should happen" clearly preclude any mere and abstract foreknowledge and foretelling of the future. What is in view here is clearly the predetermined plan of God coming to pass. "I foretold the former things long ago, my mouth announced them and I made them known; then suddenly I acted, and they came to pass" (Isaiah 48:3 NIV) Prophecy isn't just God's ability to tell what's going to happen, but it is God foretelling what he has planned to happen, and what he is going to do in history.
So to the question at hand:
Does God predestine everything or is man free? My answer is, "YES".
If you ask me how that can be I will respond:
"The secret things belong to the LORD our God, but the things revealed belong to us and to our children forever." (Deuteronomy 29:29 NIV)