G.I. Williamson offers some good insight when he comments on the 9th Chapter of the WCF. I'll paraphrase.
The confusion about free will is that ability is brought into the picture in the wrong frame. Free will only describes what man may choose, it has nothing to do with his real actions.
In this way, mankind always has the choice to do good or evil. Only in the estate of glorification will men's choices be limited to only good.
Now, the unregenerate man may choose good or evil, but he only has the ability to do evil. Even if he chooses to do something good and attempts to do it, the actions are not considered good because of his deadness in trespasses and sins.
A good example someone told me recently is that even Al Qaeda has their version of the Red Cross. These are men actually choosing to do good, but because they know God and suppress the truth in unrighteousness, they cannot perform anything good.
The difference with a regenerate man is that he not only has the same choices (a truly free will), but can actually do something good because of the Holy Spirit. However, even if he were choosing the good all the time and performing what he chose, he is still an unprofitable servant and has not performed perfectly, thus his need for a savior.
So, free will is mostly about choosing, not acting on the choices.
The second part of your inquiry has to do with man's actions and God's sovereignty. I have to admit that this subject is still over my head. I know that God is sovereign and has decreed whatsoever comes to pass. I know that man is responsible for his own actions. How evil comes about is on account of man, but permitted by God.
I do not know how to explain it, but I do believe that God is perfectly just in all that He carries out.
I hope this helps.
In Christ,
KC