This is a good post by Dave Armstrong: http://socrates58.blogspot.com/2005/10/reflections-on-justification.html But he has an excerpt specifically which is useful:
"For Luther sin is passion, for Catholicism sin is in the will - the act of choice. In Freudian terms Luther's sin is libido, Catholic sin is ego. From this a number of consequences flow. From the Lutheran point of view the conclusion follows that, as nobody is ever entirely passionless (least of all essentially passionate types like Luther), there can be no freedom from sin in this world. Man is born and dies in iniquity. The utmost he can attain is an assurance that this won't be counted against him - that Christ's redemptive suffering covers all. Hence justice is only imputed - the Lutheran concept which became the center of controversy."
In Catholic teaching, on the other hand, the work of justification is not limited to the act of faith with which it begins. It is carried on by the use of the sacraments, the life of charity and the practice of good works, so that human nature recovers the spiritual life that was lost by sin and man becomes a new creature . . ."
Good habits make a man good and bad habits make him bad. This . . . was ignored or underestimated by Luther. It seems that there was a certain confusion in his thought on these matters. He had become convinced of the worthlessness of pious practices - that it is no use fasting or saying long prayers or making a pilgrimage or a vow. Good works, however, are not merely pious practices, they are simply what the words denote - doing good - and it is a fallacy to argue that such action has no value from a religious point of view." (5:78-79) - Christopher Dawson
You're free to disagree with the latter half and Catholic justification, but what I wanted to point out was the difference between a Lutheran and Catholic view of sin, that is extremely important for the rest of our theology. It is a prime difference and it is simply important to note.