Old testament is believed to mostly have been written by Moses himself, either divinely inspired or not and the new testament is a bit obvious isnt it?
As for the old testament, yep, if you are catholic it has been heavily edited but if you are of protestant denomination then apart from the book of kings being split into 2 and a a few stories out of order then you are pretty much reading the hebrew version.
The new testament originally appeared in Greek after all the stories were collected.
Word of mouth maybe and people were so inspired they wrote these stories down. To me the new testament especially seems to be a good line of how to lead you life and probably helped some to shaping some sort of right from wrong/judicial system. However with all things, it can be taken out of context. We had a conversation on here a couple of weeks ago when a regular church goer used the words an eye for an eye out of context to how it is supposed to be read.