The universe is governed by a set of physical laws. If we knew all of those laws, physicists say that we could predict everything. This was generally accepted and was underscored by Einstein's famous quote, “God does not play dice” which means that God or the laws governing the universe are not random and unpredictable. Rather, they are systematic and deterministic. However, discoveries in the realm of quantum physics have shown that there is a randomness and unpredictability amongst subatomic particles. So, it is difficult to say that the universe is completely deterministic. The question of determinism as it relates to conscious beings (and whether or not they have free will) is even more complicated.
Some theorists, such as Wilhelm Wundt, have supposed that there is a difference between the brain and the mind. The brain responds to stimuli the way the body does and therefore the brain's reactions are determined by genetics, DNA, and environmental factors. Like the physical laws of the universe, if we knew all of these factors completely, we could always determine what the brain would do. However, Wundt supposed that the mind was a psychological component to the physiological brain and this psychological component was capable of free will and creativity.
One of the biggest proponents of determinism was B. F. Skinner. He believed that all human behavior was the result of conditioning. This means that all of our actions and thoughts could be determined by conditioning (such as Pavlov's dog learning to respond to a bell). His is an extreme position because he believed that humans could be conditioned completely. If this is the case, humans would not have free will. This is a radical position but behavioral psychologists like the theory because they can provide countless examples of humans doing things for specific results. Thus, we don't willingly eat, procreate, seek pleasure, etc. because of free will; we do so because we are genetically determined and conditioned by the environment to do so.
Some theorists argue that consciousness is a bit different than other physical phenomena. Maybe consciousness is a different kind of qualitative entity (whole greater/different than the sum of its parts – the brain and body). It is easier to say that unconscious things (stars, planets, oceans, etc.) are determined by physical laws. It is more difficult to say that conscious beings are likewise determined. Other philosophers (i.e., existentialists) claim that humans have free will and with that comes responsibility. They argue that to deny free will is to say that we have no responsibility for our actions and this could have terrible moral and ethical repercussions.
I would say that humans, being conscious, have relative free will. That is, I could always choose not to act in a way that I am biologically and/or environmentally conditioned to act. If a brick is thrown at my head, I could choose not to duck, which would be stupid but I could still make that choice for no other reason than to assert my free will. The bottom line is that there is no evidence that can completely prove or disprove free will.
Daniel Dennett has suggested that perhaps we are determined by the laws of physics. However, he makes an argument that we use such things as morality and ethics to make choices. That is, we invented morality and justice to make the world better and in this sense, we invented a virtual free will that can affect the physical world.