What does it mean to take the Bible "literally?" Are we supposed to think trees can actually clap their hands, or David's tears really dissolved his mattress, or our sin demands we bring birds, bulls, and lambs to the priests for sacrifice? The Bible is a great book, but ... really ... isn't it just a bit much to say we take it "literally?"
Here's the deal: I believe the Bible should be treated with the same respect and literary sensitivity we give to any other piece of literature. That means we pay close attention to several things among which these 3 are primary: Authorial Intention, Literary Context, and Historical Context. When we do we find that, like all other literature, we are to take it "literally."
Authorial Intention: This simply states that the beginning place of meaning in any piece of literature is this: "what did the original author intend the original readers to understand from the words he or she wrote?" If we start here it will prohibit us from taking certain texts out of their original context in order for us to make a pretext out of them. The Bible deserves to be studied, taught, and understood in the way it was written, starting with the common understanding that literature doesn't mean what I can make it mean. It means what the author intended, and what the readers understood.
Literary Context: Like any piece of literature the Bible makes use of all kinds of literary devices. And it is here that the "literal" thing comes into play. Do we take it literally when we read that "the trees will clap their hands?" Yes ... because we take it literally as a metaphor. We understand it as the author intended it ... as a metaphor, in this case, as a poetic vehicle for describing the celebration all creation will participate in when the Kingdom of God comes in its fullness.
Further, we understand authors sometimes use simile, hyperbole, generalizations, poetic illustrations and allusions, and a host of other literary devices in order to make their meaning vivid. So, when David says his "tears dissolved his mattress" we understand it as poetic hyperbole, meant to describe agonizing grief. To take something "literally" means to understand it as the author intended, whether it is straight journalistic fact, or some other literary device used to heighten understanding.
Historical Context: It is of supreme importance - if we are to understand literature as the author intended - to know the time and culture in which the piece was written. Take Shakespeare for example. If you've read the Bard's plays you know there are words and phrases that only make sense if you recognize the era in which they were commonly used. The same is true of the Bible. And it is not only the words and phrases but also many of the commandments must be understood against the backdrop of their day.
Take the Law of Moses for example. The Apostle Paul tells us that the Law was never intended to be permanent, but was only to show us how desperately we needed a Savior. It was a "guardian whose job was to bring us to Christ" (Galatians 3:24). This means, with the appearance of Jesus Christ, so much of the Law was fulfilled. All the sacrifices found their end in the "once-for-all" sacrifice of Christ on the cross. As well, all the civil statues of the Law, originally intended for the nation of Israel, are no longer incumbent upon those who are part of a new people - the Church - who now, along with believing Jews, are "the people of God."
It is true that some of the laws has remained God's rule for his people, and these are clearly reiterated in the New Testament in the letters that form the foundation of the church. It is essential to understand each part of the Bible in its own day, and then understand, in God's plan, some was for its time, and some continues to be for our time.
So, do we take the Bible literally? Yes, proudly. The Bible finds as its creative source the very breath of God. That's what Paul means in 2 Timothy 3:16 when he says Scripture is "God-breathed." And here we must understand an important literary element. God doesn't have lungs to breath! What Paul is saying is this: just as you and I push air over our vocal chords to produce words, so also the Bible has been produced by God himself. He is the author of Scripture, and it is our privilege to understand it, honor it, study it, and have the courage to obey it. Soli deo gloria!