Chosen By God

What exactly does the Bible mean that we are "chosen" by God?

Ephesians 1:3 - 10 (ESV) Blessed be the God and Father of our Lord Jesus Christ, who has blessed us in Christ with every spiritual blessing in the heavenly places, even as he chose us in him before the foundation of the world, that we should be holy and blameless before him. In love he predestined us for adoption through Jesus Christ, according to the purpose of his will, to the praise of his glorious grace, with which he has blessed us in the Beloved. In him we have redemption through his blood, the forgiveness of our trespasses, according to the riches of his grace, which he lavished upon us, in all wisdom and insight making known to us the mystery of his will, according to his purpose, which he set forth in Christ as a plan for the fullness of time, to unite all things in him, things in heaven and things on earth.

I see that there are 2 primary beliefs in Christiandom as to what this means:

1. God sovereignly chooses whom He will bring to Himself through His Son Jesus Christ by effectually drawing them by the power of His Holy Spirit. Thus, He gives faith and repentance to those whom He chose before the foundation of the world.

2. God chooses those who choose - of their own free will - to repent of their sins and believe in His Son's death, burial and resurrection as their complete payment for their sins. Thus, the faith (from a seed given by God to every man) and repentance are self-produced out of their own free will.

Which view is Biblical? Is it one or the other or a combination of both?

Was(Is) Jesus a Calvinist?

Dr. Sam Storms gives an explanation of what he believes about Jesus being a "Calvinist". See here for his explanation and exegesis.