It does not logically follow that omniscient god = no free will.
Simply because god would know what would happen does not mean that god would actively effect what happens.
Christianity is premised on an inactive god, with non-omniscient intercessors (saints, etc...), who created the world and now is just watching passively. All action on earth in sacred texts, once creation is finished, is done through human intercessors.
Free will is only a contradiction if you view humanist religions--Christianity and Islam among them, in the Greek humanist tradition, having drawn greatly from such names as Plato--in the same vein as ancient polytheist religions, where gods directly managed the affairs of man. And played with them as children play with toys. But that view of the more modern religions is an inaccurate characterization. And those gods were not omniscient.
In the real world, I think that religion is extremely important. It serves as a necessary stabilizing force in society. When you view those societies which have made attempts to banish mystic religions without replacing them with secular ones (Reign of Terror France, for example), civil society breaks down rapidly and ceases to exist. Even "secular" governments, such as the Stalinist dictatorships of the 20th century, created state religions every bit as fanatical as mystic ones. It provides a way to civilize the young in a way where consequences are unbelievably horrid--children need to have religion. And it is a simple way for governments to maintain some stability--an undeniable necessity.
But, having said that, I have none myself.