This topic has been coming up a lot for me recently - looking at Romans 6 and 7 (and just starting 8) at Church, and reading Colossians with an international student.
Those who are Christians, who are in Christ have been 'regenerated' or 'born again'. They have been united to Christ in his death and resurrection - it's what baptism symbolises, the death, burial and rising again of us in Christ.
We have died with Christ to the basic principles of the world (Col 2:20): sin, religious law, the Devil, religious rituals/festivals and so on, therefore we should act like it.
We have been raised with Christ, who sits at the right hand of God, therefore we should act like it.
Sin has no power over us - we do not have to sin. We don't have to follow religious law - it cannot condemn us (Rom 8:1), we are justified by faith, not obedience to the law. We don't have to hold the Sabbath or celebrate feasts or fasts - we don't need to give up things for Lent, we can eat meat on Good Friday (Col 2:16). We can taste, touch, handle as much as we want (Col 2:21) - pork, blood, shellfish can be on the menu, we can touch dead people, or menstrating women, or mildew without having to go through all sorts of rituals.
We should act as if in the presence of God: holy and blameless. Set our eyes on God (Col 3:1-2), on Christ, not on earthly things. An excellent practise of faith - looking to Christ, not how unsinful we're being this week, how much we are looking to Christ (we're on earth, remember), how much better/worse than others we are.
It's two sides of one coin, we don't have to follow the Law, but we want to do what pleases God. Shall we sin so grace increases? Because we can sin without condemnation? By no means!
We should throw off the remnents of our old self, the dead self - our sinful nature, our attempts at law keeping and other things that the cross defeated and put on the new self, full of fruit of the Spirit, "being renewed in knowledge in the image of its Creator." (Col 3:10).
"Being renewed" - it's growing more like Christ, it's gradual process of God and you working together, with God finishing off the work when, one day, we'll be like the returning Christ. Sin has no hold, it's lost - it's still fighting, but it cannot win. Legalism has no hold, it's lost - it's still fighting but it cannot win. Regeneration, being born again, makes you free to live the life you were meant to - one that glorifies God, one that looks to Christ's lawkeeping, not our own.