Okay, here's my take on it..for what it's worth...
I absolutely do not believe that some people are meant to be born "bad" or others are meant to be "victims." I don't believe people make this decision before birth "You be the murderer, I'll be the victim" and then things work out that way so both souls can "learn something." My feelings on this are that we simply are who we are--complicated beings who are all capable of doing good and bad things, which, once done, reverberate like small waves that affect the rest of the world and everyone in it. I DO believe many souls are born not having learned much of anything in a lifetime and if they have spent a lifetime (or two or three) doing negative things like murdering people, etc., then they might be born with a tendency towards doing more of the same--because that is what they are familiar with and it's what they do. I believe we are who we are from the very beginning. I, for example, loved drinking coffee from the time I was very, very small. I wrote stories in my head before I could read--I was born doing this. So I think we are born being who we are and part of that might be ugly. In other words, we are not predestined--we have free choice--but because we are comfortable, to an extent, being who we are--however ugly--change takes time.
For example, people tend to hang in circles that are familiar to them. I think people who have a certain negative outlook or energy (to use a new-agey term that probably isn't completely accurate) hang around others with the same, which can result in a circular pattern of negativity that I think, can affect the next life. I don't believe that we have any true knowledge when we die, I don't believe that we can see our lives mapped out and decide, "Oh, I need to work on X the next time around." I just don't see people as having the wisdom to do this. Maybe that's where God comes in, but I still think we tend to be drawn to those who support our familiar patterns. I mean, for those of us who believe in reincarnation, often times people can recognize mannerisms, stances, facial expressions of a PL persona--Stevensen notes this often in his work. Then it stands to reason the rest is similar too. If a person continues to like cream in his coffee and sits with the right leg crossed over the left, then the potential for violence might also remain.
I see Karma as doing small things (or larger things) that ripple in the world. Take littering, for example. When we toss a piece of trash on the ground, that trash doesn't leave ourli fe. Someone has to pick that up--probably someone very poor, whose life is not as easy as ours, who is tired, hot, worried about money and children and we really have to stop and think--wouldn't their life be just a little easier if they didn't have to pick up our trash? Or, if we litter, someone has to look at our 7-11 cup blowing around in the wind, all ugly. Near my house, there is an old Walmart bag stuck up in the trees and it's been there for about a year. It nags at me when I drive past it and the fact that it's up there changes the way I see the world, on however a minute scale, but still. And in a very small, tiny way, it reflects itself in the world. I think Karma is like this. When we do things that hurt other people--through being thoughtless, self-centered, rude, or even by doing downright evil things--the whole world feels this. And because we all share this world, we are all affected. We have to fix what we have done wrong to set things rolling the right way again. That's my take on Karma. When people act badly, it will affect their future lives (I think) not in some concrete, logical way (ie: "you have been a murderer, now, you wil be the one to be murdered"), but just through the way--whether we understand why or not--the first actions have caused a ripple in the world. I'm not very good at explaining it. But a person dealt a very hard hand--possibly through bad karma--can still grow in their next life if they make the right choices in THIS life. But I don't think it is easy to overcome.
That probably didn't make as much sense as it could, but that's my take on Karma and free choice.
Kim