In Catholicism, in what sense is free will restored by baptism? The Second Council of Orange, Canon 13 states:


  Concerning the restoration of free will. The freedom of will that was destroyed in the first man can be restored only by the grace of baptism, for what is lost can be returned only by the one who was able to give it. Hence the Truth itself declares: "So if the Son makes you free, you will be free indeed" (John 8:36).


On the other hand, the Catechism of the Catholic Church makes it sound like baptism is totally unnecessary for free will (Paragraph 1705):


  By virtue of his soul and his spiritual powers of intellect and will, man is endowed with freedom, an "outstanding manifestation of the divine image."


How are these teachings reconciled? Do the baptized have some sort of "premium grade" free will while the unbaptized have "mid-grade" free will?
The 2nd Council of Orange was assembled, as the document itself states, to address the controversy between Augustine and Pelagius.  In short, the Council was about whether original sin existed in new born or if they were born free from the stain of original sin.

If you read the first Canon you can get a better context of what the Council means by Free will.  If we are slaves to sin, we are not free.  Pelagius was teaching that a child was born in a state of innocence capable of Free will without the slavery of that sin.
Contrary to Pelagius, Augustine presented a case that a person was  “Good Enough” to exercise unredeemed free will (one bound to the sin imparted by the fall) and lay hold of the Grace provided by Christ.  


  THE COUNCIL OF ORANGE (529)
  
  The Council of Orange was an outgrowth of the controversy between Augustine and Pelagius. This controversy had to do with degree to which a human being is responsible for his or her own salvation, and the role of the grace of God in bringing about salvation. The Pelagians held that human beings are born in a state of innocence, i.e., that there is no such thing as a sinful nature or original sin. As a result of this view, they held that a state of sinless perfection was achievable in this life. The Council of Orange dealt with the Semi-Pelagian doctrine that the human race, though fallen and possessed of a sinful nature, is still "good" enough to able to lay hold of the grace of God through an act of unredeemed human will.
  The Canons Of The Council Of Orange
  
  Canon 1.
  
  If anyone denies that it is the whole man, that is, both body and soul, that was "changed for the worse" through the offense of Adam's sin, but believes that the freedom of the soul remains unimpaired and that only the body is subject to corruption, he is deceived by the error of Pelagius and contradicts the scripture which says, "The soul that sins shall die" (Ezek. 18:20); and, "Do you not know that if you yield yourselves to anyone as obedient slaves, you are the slaves of the one whom you obey?" (Rom. 6:126); and, "For whatever overcomes a man, to that he is enslaved" (2 Pet. 2:19).


Paragraph 1705 (Provided), concerns the attributes given to a person made in the “IMAGE OF GOD” When we fell from the Garden, our first parents ate from the “Tree of GOOD and EVIL” not only the “Tree of Evil”.  Now, having an intellect and the ability to choose between Good and Evil, our redemption depends on our Free Choice.  The Baptized Christian, free from the stain of original sin, is totally free in his will, free from the Guilt and punishment of previous sins able to choose and through the Sacraments of the Church, maintain the family relationship they entered into.  

In Apostolic tradition it is indeed a better free will after Baptism, it is a free will where even the damage caused by sin to a person’s soul has been removed, along with the guilt of any past sins.  They are truely Free, Not Slaves to Sin, but Slaves to God, and by living an obedience to that faith, perserveres to sactifiction and Glory.