Probably the single most confusing concept in Islam is that of fate and predestiny. Muslims frequently hear and read that our lives, and everything, even where we end up after we die is predetermined. This just baffles the heck out of most of us though because if that's the case, then where is justice? Why bother doing good deeds at all? Why bother doing anything?
When I was in the middle east I was talking with a cousin of mine and he was telling me a story about how one of his professors used the concept of dimensions to explain the concept of God. Expanding upon this in my head, I think I finally managed to explain all this fate and predestiny stuff, so here goes.
DISCLAIMER
THE FOLLOWING IS WHAT I USE TO CONTENT MYSELF. IT MAY BE COMPLETELY WRONG AND IS A RESULT OF MY OWN THINKING.
The religious texts say that everything we do, etc is fate. The way I see it is that, yes it is fate, but it does not control us, we are not forced to follow it but we do. If you imagine our lives as a film, God can scroll through the film. He knows every part, the beginning, middle and end. It's part of His "All-Knowing"-ness. So when it's said "What is written", it's like God went through our film and simply wrote out everything we are going to do. The key point is that the film came first (so to speak): we decide our actions and decisions but God already knows them. It's like a friend who's already watched a movie telling you what's going to happen. He knows how the movie ends, and what happens to the main character, but that doesn't actually affect the main characters actions.
Now, to explain predestiny. As I imagine it, we are on game boards, or at the centre of a maze constantly moving towards the edge. The walls of the maze are, for lack of a better word, opportunities and events. These choices and opportunities are built into the game board or maze and are predetermined: they are "factory made". It is our free will that allows us to choose which opportunities we take and how we respond to events. Some people's mazes will be simple, with few difficult events and opportunities, while other's will be harder, but everyone has the ability to choose their own paths. At the end of the maze, the edges of the board is death and beyond that half the board is surrounded by Paradise, while the other by Hell.
So, to summarize my understanding/explanation. We have free will, but a God-made maze. We have to make the right choices at the events and opportunities God built into our mazes. God, being Master of Time and All-Knowing, knows what path and decisions and actions we will take and make, and has written it down, but this does not control us, it's simply an outline of what we are going to do anyway.
I hope that explanation helps and isn't totally blasphemous.