The error in your thinking is in supposing that learning new things about the world and ourselves has no effect on our behavior, but in fact, those of us who are curious are constantly learning new things, and the new information alters our behavior in totally determined ways.
Suppose you learn that the banks are returning their bailout to the taxpayers by giving $1000 bills to anyone who walks in the door. Like most of us, you would probably react to this information by rushing to the nearest bank. The fact that all current events are determined by past events doesn’t mean that change isn’t happening. The world is in constant flux as events deterministically ricochet off each other. Each new thing you learn becomes part of the matrix of factors determining your behavior.
If you learn that the idea of free will is a ridiculous artifact of past errors in human thinking, this realization becomes another determinant in your behavior, and it may have numerous consequences: The ideas of pride in your accomplishments and shame for your failures may seem equally ludicrous, as will disdain for those less fortunate than yourself. The judicial system may be seen as medieval and in need of reformation, etc. These kinds of changes are not trivial. When people learned the world was round, not flat, it opened up all kinds of new travel opportunities.
Believing that there is no free will doesn’t eliminate our desire to be happy, and we will continue to pursue any option that presents itself that might lead to happiness. Believing there is no free will doesn’t prevent our rushing to the bank to get our thousand bucks.
Believing that free will exists, on the other hand, will allow people to keep abusing each other as they have for thousands of years, all as the result of an illusion.
The problem with the notion of determinism so far as consciousness goes is that it is ultimately pointless.
Suppose, for example, we agree that everything you will think or do is completely determined by past events. Now what? Are you going to stop making decisions, stop acting? No. You will behave exactly as you did before. In fact, if you're completely determined, you will have no choice but to do it.
On the other hand, if free will exists and you believe that it doesn't, you will likely not exercise what will you have. It seems only reasonable you won't seek out options that you don't believe exist.
So in the end, if free will exists it is better to believe it does, and if it doesn't it makes no difference if you believe it does or not (and perhaps makes you happier to believe you have some significance greater than a ball rolling down a hill). Same answer either way, and determinism loses.
The human mind is pretty much just a complex machine that accounts for many factors. Emotion, morality, and beliefs are just ways to choose all actions. But since the brain is an organic machine, it will react the same if put in the same situation more than once with all the same factors and no information of the other outcome, so the reaction is set in stone. Chaos is unpredictable because of too many factors, not because it is random, so each happening is set in stone. Free will is an illusion, but we feel we choose the result, and we cannot predict all results of people or outcomes, so we cannot 'program' to it. I may know someone well enough to think I know, but the brain has way too many neural connections to always predict accurately. It doesn't mean it's impossible, just hard to do and has room for many errors.
I believe in the illusion of free will, but not actual free will.
@xfacex: Apropos "If we don't have free will, that must mean we are a deterministic (finite state) machine": I see a leap in logic here - absence of free will doesn't necessarily imply that we are deterministic, for there is the possibility that, even given complete knowledge of initial conditions, it is not possible to know future states (one of the precepts of pop chaos theory).
The other bit "and we cannot be accounted for our actions" is really independent of the free will problem. Crime and punishment are entirely cultural. In some (all?) parts of the world, these things depend upon gender, sexuality, access to liquidity, religion, race, tradition, age etc. etc.