Headinhands, what you are talking about is not free will at all, it is the problem of evil. I think actually the mention of free will was a bit of a distraction, because your real question is not 'why do humans do bad things?' but 'why does God not intervene to stop them? (and while we're about it why doesn't he stop natural disasters, diseases and other bad things not caused by humans?)'.
In other words, it's not the free will of humans you are worried about, it is the free will of God, no? Why doesn't God stop us doing bad things? As I've already explained several times, if we did not have free will we would be automatons, unable to do anything without being directed to by God. That means we would have no moral capability at all, and no choice. The Matrix plays with these ideas in quite a clever way, if you like that kind of thing.
But for you the problem is God and the existence of evil. Why doesn't God simply arrange the world so that no bad things can happen? But if we have free will (and if the world is the way it is, full of toxins and tectonic plates and weather and insects and viruses), then terrible things will happen. And if we are to have free will we have to be free to do the bad things -- because, as I've said before, you can't have free will conditionally.
The Christian response to this as Greenheart said above is that in Jesus God shares our pain with us. He willingly underwent stupid, senseless undeserved pain and suffering, just as we do; he willingly went to his death knowing that he would die, really die, as we do. When we suffer, he is there. When we cry, he cries with us. God looked at human life, with all its pain and sorrow, its cruelty and spite and hatred, all its joy and beauty, and came to share it so that he could be with us through it all.
But ultimately Christians believe that at the end of time, whenever or wherever or however that is, all will be made right, and that our suffering will be redeemed, and our death will be mended. That is the hope that is at the centre of Christianity. And in the meantime through Christ, God walks beside us in the vale of tears.