What Paul is describing here is the difference between living in the flesh as oppose to living by the Spirit of God. Paul is warning against trying to live a good holy life on our own accord. When we do this, we are setting ourselves up for failure because the same principal of the previous sin nature and condemnation of the law applies. We give that which we are dead to control over our lives because we are not living out of faith but out of works.
Just as it is futile to try to work your way into heaven, it is futile to work your way through the Christian life. When Paul said that nothing good lives within him, he was referring to the fact that without Christ and apart from his born again spirit there was nothing of good in him. When we operate apart from Christ and apart from our born again spirit then we will experience the dichotomy that Paul is describing in this passage. The innate desire to do what is right is in us, but the ability to carry it out is not. The Amplified Bible puts it this way, "I have the intention and urge to do what is right, but no power to carry it out." ( Romans 7:18 Amp )
Does this mean that the Apostle Paul continually struggled with sin? Does this mean that we are bound to continue to struggle with it as well? No, absolutely not! Paul is using this illustration to contrast the different between faith and works, between living in out of the flesh verses living out of the Spirit of God. I believe the Apostle Paul understood this and lived a victorious Christian life. Christ lived through him in everyway imaginable that is why he said in Philippians, "For me to live is Christ..." ( Philippians 1:21 ). Paul did not struggle with sin because Paul lived by the Spirit of God. Again, Paul is using this to illustrate what life is like when we live by our own means. We will struggle constantly. We will desire to do what is right but will not be able to do it. Paul is setting the stage for chapter 8 by showing us how futile it is to live a life of works. When we do, we will fail.
Understanding this is huge! This is the difference between living a victorious Christian live and living a life of failure and disappointment. Today, I pray that in the same way you accepted Christ, by faith, you will continue to walk in him. I pray that you remove any efforts or works to please him and find out what pleases him by fellowshipping with him! In this, you will find freedom and experience victory!