What is God's Grace?

To me God's grace is everything he does for us to make sure we become his children in eternity, and the bride of his son Jesus short of violating our free will. So the amount of activity required on our part would be exercising our free will to turn from our sins and obey and follow Him through faith. In other words "desiring God" :) Faith is implied because God is invisible and we can't see him, yet we choose to desire him above all the things that we can see in this world. (Abraham believed in God and it was counted to him as righteousness - Genesis 15:6)

God's grace works on a legal level by providing the sacrifice for our sins by which He can blot out our transgressions and remember them no more, but it also works tangibly when God gives us his Holy Spirit when we obey him.

And we are witnesses to these things, and so is the Holy Spirit, whom God has given to those who obey him.  Acts 5:32 

And I will give you a new heart, and a new spirit I will put within you. And I will remove the heart of stone from your flesh and give you a heart of flesh. And I will put my Spirit within you, and cause you to walk in my statutes and be careful to obey my rules. Ezekiel 36:26-27 

(Side note: this was the passage Jesus was probably holding Nicodemus accountable for when he quizzed him about the need for his spirit to be "born again")

Although we have his Holy Spirit, God still cannot violate our free will, so we still have to live according to the leading of the Spirit, which we are able to when God gave us a new heart after we were born again.

There is therefore now no condemnation to them which are in Christ Jesus, who walk not after the flesh, but after the Spirit. Romans 8:1 (KJV)

Yesterday as I was reciting Psalms 23, I meditated on the verse "He leads us in paths of righteousness for his name's sake." and realized it's a reference to God not being able to deny himself and thereby remaining faithful to us even when we are shamelessly unfaithful (2 Tim 2). We're like these hopeless sheep who always go astray, fully at the mercy of our Shepherd who leads us on the narrow path that leads to eternal life. Without God's faithfulness we would be totally lost not knowing where to go and our desire to come to Him would be in vain.

Ezekiel 36 is also a good OT chapter to read on this subject. It gives a wonderful picture of the plan of God's grace proving that the NT doesn't have a monopoly on the revelation of grace.

Ezekiel 36:32 "But remember says the Sovereign Lord, I am not doing this because you deserve it..."

Grace is grace because we don't deserve it. Hence spiritual pride doesn't make sense in this context but only humility. So God gives grace to the humble, whilst resisting the proud (James 4:6)