> As I understand it, our current understanding of physics suggests a probabilistic system, but I don't think we know enough to assert that a deterministic model is impossible.

We're pretty close actually. Look up Bell's Theorem (http://en.wikipedia.org/wiki/Bell's_theorem). It has been experimentally verified countless times and necessitates that "one is forced to reject locality, realism, or freedom". "Freedom" meaning something specific in a scientific sense. Rejecting the last one implies something called superdeterminism, which is basically just determinism (the "super" implies that everything that exists is deterministic; there are no random components). Gerard t'Hooft is one of the only legit physicists left who supports a superdeterministic theory. Almost all other physicists believe that a measurement of a quantum state collapses it into a random eigenstate.

For me personally, were superdeterminism found to be true (although it's looking more likely that's not going to be the case) it wouldn't bother me in the slightest, and I don't see a conflict between determinism and free will. Imagine someone creates a movie. They decide the plot -- what happens and when. They decide the setting, the number of characters, and everything else about the movie. Then when you play the movie, everything that occurs is predetermined -- deterministic in a sense -- yet it was freely chosen outside the realm of the movie. I kind of view reality that way.