What does the 'will' of St. Paul mean?

You seem to be working through your understanding of free will. It's an extremely complicated subject. I'd like to share a long discussion on the topic with you in case you're feeling energetic. I think it (well, quite a lot of it at least) might help you in thinking through this very controversial topic: Free Will: It's Essential Nature and Implications

In Romans 7, as another contributor has said, Paul discusses his struggles with his "flesh" or, as I sometimes call it, the beast (animal) nature. Human beings always struggle with this inherited nature which impels us to do the thing we deem best for ourselves and our "tribe" and/or our offspring. Paul goes on to make the argument that, while he has failed to overcome that sin that always seems to defeat his good intentions, there is an answer--a victory--available. In chapter eight, he explains the solution to the problem he poses in chapters six and seven (principally those chapters anyway).

For Paul (I believe) free will is an emergent quality. Human beings are not in fact free, and this lack of freedom may be attributed to the impossibility of consistently triumphing over the "flesh." Freedom comes in the sacrifice of Jesus Christ on the cross and in identifying with that death. In another place, Paul says:

2 Corinthians 3:16-18 English Standard Version (ESV) 16 But when one turns to the Lord, the veil is removed. 17 Now the Lord is the Spirit, and where the Spirit of the Lord is, there is freedom. And we all, with unveiled face, beholding the glory of the Lord, are being transformed into the same image from one degree of glory to another. For this comes from the Lord who is the Spirit.

I believe that the thing we often miss is that Jesus Christ (through the Holy Spirit's work) is MAKING His followers free. We are a little bit free, simply because we are rational beings and capable of struggling against the beastial nature, however that nature is in many if not most cases stronger than our higher desires toward goodness and love. We cannot defeat it on our own though it is certainly virtuous to struggle against it.

We do not have free will in the sense that we're consistently capable of doing that which we desire to do. Neither are our actions entirely determined by outside forces (environmental stimulae, the power of God as puppet-master, our physio/mental nature, etc.).

This is why (or at least one reason why) Jesus needed to come--to set us free from that beast nature we always succumb to. Thus, the Calvinists (deterministic) are partly right and partly wrong:

• We do not have entirely free will.
• Yet: God does not compel us either to sin or to refrain from sinning.

The Arminians (non-determinists who argue that human beings do have free will) are likewise partly right and partly wrong:

• We are not controlled by God as by a puppet-master.
• Yet: We do not possess an inherently free will (at least not yet).

I believe the goal of the Father God is that human beings eventually become free of the constraints of the beast nature and thus able to do the good things we would like to do. I believe God will in fact accomplish this goal not by taking away free will, but by creating free will in His human children. When once we

1. Learn to loathe the evil
2. Learn to love the good
3. Become capable of choosing the good

We will be free. We are not free yet, but God is working to make us free.

What does St. Paul mean by 'will'?

Romans 7:18 (DRB)

For I know that there dwelleth not in me, that is to say, in my flesh, that which is good. For to will, is present with me; but to accomplish that which is good, I find not.

This is essentially a theological discussion on concupiscence (or, that which prevents the fallen sinner from doing what he ought, because of the inclinations of the flesh).

Its essence is: what I want/intend/purpose/ought to do, I cannot do, because of my fallen nature.

Wisdom 9:15 (DRB)

For the corruptible body is a load upon the soul, and the earthly habitation presseth down the mind that museth upon many things.

What St. Paul is here digging deeper into, Jesus mentions in passing to His Apostles:

Matthew 26:41 (DRB)

Watch ye, and pray that ye enter not into temptation. The spirit indeed is willing, but the flesh weak.

The teaching is that what is willed is 'thwarted' by the fallen human nature (simply called 'the flesh' in Biblical terminology).

Galatians 5:17 (DRB)

For the flesh lusteth against the spirit: and the spirit against the flesh; for these are contrary one to another: so that you do not the things that you would.

Does this verse present a similar point of view as that of Rudolf Steiner?

No, St. Paul does not teach that 'outer freedom is attained by permeating our deeds with moral imagination,' (Steiner's view) but only "by the Spirit, [putting] to death the deeds of the flesh" (Romans 8:13—i.e. he does teach it's possible to overcome concupiscence by the Holy Spirit, not the unaided fallen flesh).

Or would this verse of Paul be closer to other forms of (in)comptabilism?

This passage has nothing to do with his will being free or not free, or anything of the sort. This is about the flesh warring against the spirit. We do not say that one is not free because another free agent is thwarting their actions. Freedom to will and other freedom doesn't necessitate the freedom to be able to accompish all that is willed—which is what St. Paul is here discussing.