I don't know how to understand Paul's words when he says that he does what he doesn't want to do; and doesn't do what he knows he should. How does this fit in with God's control? This verse leads me to believe Paul has the freedom to obey or not obey.
There are a couple of ways that we talk about bondage and freedom, predestination and free will, sovereignty and responsibility. In the passage in Romans, to which you are referring, we believe that Paul is talking about himself as a non-Christian. He is saying that he has no control over his actions because the sin in which he dwells is in control.
This would be an example of the non-Christian’s plight before God enters the picture and changes his heart. Because of Adam’s sin all men are subject to sin. This means that they can do nothing that isn’t sinful because it is done in the context of a rebellious life. So, even if a non-Christian were to do something a Christian did, say give a million dollars to an orphanage, the non-Christian’s gift would be sinful and the Christian’s righteous.
It is an illustration of your overall question: does God condemn some to hell and bring others to heaven? Romans 9 tells us that God does call some people to heaven and he does create some for destruction—all for his glory.
Back to Romans 7—the non-Christian can not do anything but sin because he was born in sin and therefore his life is characterized by sin. Then in chapter 8, Paul as a non-Christian, meets God and is transformed. Now, the Christian is able to not sin.
As a non-Christian he could not choose righteousness, then, as a Christian he could choose to do right.
We can talk about this some more, if you’d like.