My friend and I have been debating this issue for some time: Can God be all-knowing and free will exist at the same time? -- Steven Soo (Sydney)
I wish I had time to write extensively about this issue, which in 2001 was a "hot topic" among theologians and Christian writers. May I refer you to Christianity Today--a magazine worth subscribing to for its articles and updates. Two consecutive months in 2001 dealt with your question, which concerns "Openness Theology."
If you make it through the articles in Christianity Today and really want to stretch your brain muscles, try reading Abraham Heschel's The Prophets. This Jewish scholar thoroughly explores the questions surrounding your question. (Does God change? How is his omnipotence related to our free will? What, if anything, is "future" to God? Does God suffer? Is the Bible couched in language that connects with us though if it were taken literally it would misrepresent God? and so forth...)
My position is that I think God absolutely is all-knowing; but since he is timeless, his knowledge of our future is conditional on our freewill choices. I have no problem with this view of God. I realize this is a complex issue and not everyone will agree with me.