Greg Koukl at Stand to Reason has an article dealing how to answer the question "Do your take the Bible literally?". Here is an excerpt from the article:
For example, what if I asked you if you read the sports page literally? You would pause, wouldn’t you, because there is a sense in which you read the sports page in a straightforward way. You read it with the understanding that the writer is trying to communicate something to you in a clear fashion, and the means he uses to express himself is meant to give you a solid grasp on the details about which he speaks - say which team was victorious in a game. You get an idea of what took place. You don’t think when you open the sports page, Gee, should I read this literally or not? You just read it and it’s the language itself that the writer uses and the conventions that are presumed by all readers that allow the process of communication to take place. You’re not scratching your head and thinking, Gee when he said “the Angels devoured the St. Louis Cardinals,” was this cannibalism? Am I supposed to take that literally or not?