My religion also allows for the existance of both Good and Evil. Yin and Yang - without one, the other could not exist, and we're locked in the eternal struggle between the two forces. You offered the argument in the form of the question 'Why does evil exist?' - easy enough to explain.

Without evil, we wouldn't appreciate good. Without bad days, we wouldn't know what a good day was. Without keytones and methane, we wouldn't like the odor of flowers.

Applying this back to Christianity - We live in an imperfect world. There is sin among us, and none are free of it, but some of us are forgiven. Does evil exist in the Christian mind? Absolutely. God is Omnipotent, but he wants us to actively choose to believe in and follow him. In our faith, those who have knowledge of him and still deny him are damned - evil. This doesn't mean he's going to eliminate them on the spot, or kill all evil immediately. Our faith leads us to believe that he's giving every opportunity for those 'lost souls' to see the error of their ways and repent.

Our faith also allows for 'evil occurrances' - like 4 hurricanes hitting and devastating parts of florida, or incurable diseases that ravish one's loved ones. It does so by the existance of the 'Evil one' - Satan.

Hope that at least hit the point on a few things, and maybe taught a bit.