Hi tinkle-berry,
literal (or plain) interpretation is a conservative approach which assumes the bible is the infallible word of god. Literalists/conservatives point out that the bible contains poems/parables that are not intended to be taken literally but events such as the creation in 6 days and Noah's Ark are interpreted literally. Conservatives argue that the inerrency of the bible proscribes as sinful behaviour such as premarital sex, homosexuality, birth control, etc, etc. (basically anything to do with sex)
Liberal interpretations consider the bible an important historic document written by fallible humans about their relationship with god. According to liberals the bible can and does stray from what god intended and modern science clearly shows some bible passages to be false such as the creation in 6 days and Noah's Ark. Liberals would argue that many passages in the bible are not relevant to modern times and should be ignored. In particular, the low status of women, support for slavery and the proscribed sexual behaviour above.
In reality, obviously, there are many views in between and many people who see the bible as just an old book. See:
http://www.religioustolerance.org/chr_inte.htm