Free will vs. determinism

I'm reading another brilliant book. This time it's Freedom Evolves by Daniel C. Dennet. It discusses a lot of important philosophical issue, and I don't have time to get into all of them here. But one of the most interesting points Dennet makes is that even if the world is entirely deterministic, the concept of free will is still relevant.

Let us suppose for a second that we live in a universe discretized in space and time where every next state of the physical world directly follows from the previous one. Then whatever we say or do, whichever way we move is going to happen no matter what, and the concept of making a decision is an illusion. We think we decided something, but in fact our whole being was set in motion from birth, and that birth itself was meant to be because of the birth of our parents, and so on and so forth back to the Big Bang itself.

Interestingly enough even if the world is entirely determined, there's one important detail: we still don't know what it's going to be, and even if we could find out, it may be too complex of a process. I.e. by the time you take all the variables into account (even if you had access to all of them), the action has already been taken.

So while from the point of view of an omnipresent being (who knows all the variables of the universe and can compute any combination of them instantaneously), this world may be determined, from the point of view of the agent doing the action, there's no reasonable way to either access all the variables or to compute the action based on them. The same goes for any non-omnipresent being (e.g. a human) observing the agent about to do the action. If this being has limited memory and limited processing power, he / she still may not be able to determine the action of a deterministic agent in a deterministic world due to

1) Limited access to information about previous states
2) Sheer complexity of the world
3) The complexity of the agent we're observing

Thus even in such a deterministic world, we can use the term "free will" or "decision-making" as a convenient tool for explaining our own actions or actions of others.