I love how you think you can read Paul's mind. Doesn't the greek language have the word "chose?" If so, why didn't he use it if that is what he meant? I think he might have meant "foreknew"..."to intimately and perfectly know before hand."
I believe there are several ways you could take this:
1. He foreknew them based upon his choosing them for salvation
2. He foreknew them based upon their choosing to believe in and love Him
IN both this cases, God knows those who will spend eternity with him because God is not bound by time, so in either situation you have an intimate and perfect foreknowing of the individual. That does not necessitate a divine predetermination for that individual to love God.
However there is a third possible way to take this passage. As Adam Clarke more thoroughly explains, verse 29 (as you pointed out) is a break in which Paul shifts to show how our calling and overall plan of redemption is an example of how "all things work together for good." Thus, Paul simply takes us through the steps in the redemptive plan of God for those who love him.
In order to this he first gives us, in this verse, the foundation and finishing, or the beginning and end, of the scheme of our redemption: For whom God did foreknow, he also did predestinate to be conformed to the image of his Son. To foreknow, here signifies to design before, or at the first forming of the scheme; to bestow the favour and privilege of being God's people upon any set of men, Romans 6:2. This is the foundation or first step of our salvation; namely, the purpose and grace of God, which was given us in Christ Jesus, before the world began, 2 Tim. 1:9.
The best analogy I can think of for better understanding this perspective is that of a football coach before the season begins and before his team has been assembled: He might foreknow the final product that the players will become (saints in glory) and might predetermine a prefect game plan to train his future team to ensure they are conditioned (conformed) and execute their game so as to certainly win the championship (salvation/glorification), but that doesn't mean He predetermined who would or would not be on the team. I know analogies always have holes in them, they are just used for clarity.
Exactly my point earlier. Belief, and thus the means it was applied (effectually or freely), is assumed and thus this passage is not conclusive on our point of contention.