In Act 1, Scene 4, Lines 27-30 of Macbeth, what does Duncan plan to do? Why is he doing this? Given Duncan's earlier statement, what does this...

Duncan plans to promote Macbeth to Thane of Cawdor because he considers him a hero.

Previously, Macbeth’s heroic actions were described.  The Thane of Cawdor was a traitor, and Macbeth defeated him at great personal risk in a dangerous and bloody battle.  For these actions, Macbeth is considered an honorable man and a hero.  Duncan wants to promote him and help guide his future so that he can move ever higher in the noble court.

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Duncan plans to promote Macbeth to Thane of Cawdor because he considers him a hero.

Previously, Macbeth’s heroic actions were described.  The Thane of Cawdor was a traitor, and Macbeth defeated him at great personal risk in a dangerous and bloody battle.  For these actions, Macbeth is considered an honorable man and a hero.  Duncan wants to promote him and help guide his future so that he can move ever higher in the noble court.

Welcome hither! 
I have begun to plant thee, and will labour 
To make thee full of growing. Noble Banquo, 
That hast no less deserved, nor must be known 
No less to have done so, let me enfold thee 
And hold thee to my heart. (Act 1, Scene 4)

This fits with Duncan’s earlier statement that he has been too slow in elevating Macbeth.

O worthiest cousin! 
The sin of my ingratitude even now 
Was heavy on me: thou art so far before 
That swiftest wing of recompense is slow 
To overtake thee. (Act 1, Scene)

Duncan's words reveal that he is an honest and good king who is trying to do the right thing, but that he is also quite dense.  He fails to see Macbeth's true nature.  This will cost him dearly.  Macbeth is much more unstable than he realizes.

Duncan has no idea what the witches told Macbeth.  He assumes that he will be thrilled to hear of his promotion to Thane of Cawdor.  Macbeth is, but not for the reasons Duncan believes.  Macbeth takes this first promotion as proof that he will soon be king.  If one prophecy came true, won't the others?  When Duncan disappoints him by naming Malcolm as his successor instead, Duncan sets events in action that will bring about his doom.

Macbeth is immediately upset that Malcolm was chosen over him.  He comments in an aside that his heart desires more, and he hopes no one else can see how ambitious he is.  He will act on his desire and the feeling that he was overstepped soon, by killing Duncan and framing his sons.