In the beginning God created the heavens and the earth. Now the earth was formless and empty, darkness was over the surface of the deep, and the Spirit of God was hovering over the waters. And God said, "Let there be light," and there was light. God saw that the light was good, and he separated the light from the darkness. God called the light "day," and the darkness he called "night." And there was evening, and there was morning - the first day. -Genesis 1:1-5 (NIV)
Most religions have holy books of one form or the other. In Hinduism, there are Vedas which contain "eternal truths". Then there are the Itihasas or epics like Ramayana and Mahabharatha. The Mahabharatha contains the Bhagavad Gita, Lord Kirshna's advice to Arjuna.
Islam has the Quran, Sunnah and Hadith. The Quran was supposedly revealed by the angel Gabriel to Prophet Muhammed and is considered to be literally the word of Allah or God.
The primary scripture of Judaism is the Torah which includes the first five books of the Hebrew Bible. The Christians know the Hebrew Bible as the Old Testament. The canon of the Hebrew Bible is called the Tanakh. The Tanakh comprises of the collections of Torah, Neviim and Ketuvim. Then there are the Talmuds which are attempts by the Rabbis to elucidate the Torah. The Tosefta is another competing collection of halakhoth or rules.
Christianity has the Holy Bible which includes the Old Testament and the New Testament. The Old Testament is the Hebrew Bible or the Jewish Scripture. The New Testament includes the four Gospels, the Acts of the Apostles, a collection of Epistles and the book of Revelation of John.
A survey by The Pew Research Center in 2008 found that 33% of Americans considered scripture to be word of God, literally word for word. Another 30% considered it to be also word of God, though not word for word. 28% considered it to be book by mere mortals. 
In this post, let me talk primarily about the Christian scripture. Let's start with the Old Testament.
Young Earth Theory
The first book of the Old Testament is the book of Genesis. Tradition credits Moses with having written this book. It describes the origin of this universe. God created this world in six days. On the seventh day, he rested. The first humans created were Adam and Eve. This story is the source of the Young Earth Theory, the theory that God created this universe in the recent past. Back in the seventeenth century, using the genealogy and the ages of our ancestors mentioned in the Bible, Bishop James Ussher famously dated the first day of creation to Sunday 23 October 4004 BC. Depending on who you ask, the calculations vary a bit, but sometime between 6,000 to 10,000 years ago, this act of creation is supposed to have happened.
The young earth theory is not a fringe theory or without supporters. A 2010 Gallup poll found that 4 out of 10 Americans believe this. According to the published results, this percentage has remained in the forties for the past thirty years. That is a lot of support! However, this view is quite incompatible with what science has found. Here is what science tells us.
The universe originated about 14 billion years ago with a big bang. 
The planet Earth is about 4.5 billion years old.
Life first appeared on this planet about one billion years ago.
Life on earth evolved from primitive single celled organisms to complex animals and plants.
Human beings and apes (and every other plant and animal on this earth, for that matter) evolved from common ancestors.
The fossil record that we have illustrates evolutionary change over the past millions of years.
Young earth theory contradicts sciences like biology (the theory of evolution and palaeontology), astronomy, geology, archeology, physics etc .
The Global Flood
The story of creation in the Bible is followed by the story of the Flood. A giant flood covered the entire earth washing away as a punishment, most of its inhabitants. The only survivors were Noah and his family of eight and a pair of all the animals Noah took with him in his arc. 
There are problems here as well. To drown and cover all of the earth in forty days, we'd need a rain coming down by the buckets – actually a bit more than that. Mt. Everest is approximately 5.5 miles (29,029 feet) above sea level and earth's surface is approximately 200 million square miles. To cover that, the great flood would have to produce about 1.1 billion cubic miles of water and in just about 40 days or 289 cubic miles of water per second. According to the US Geological Survey, the earth has 332.5 million cubic miles of water. This includes all of the oceans (96.5%), ice caps, glaciers, fresh water, ground water and atmospheric water (0.001%). 
A simpler calculation is that the water level has to rise about (29029 ft÷40 days) 726 feet per day for forty days to cover Mt. Everest. Per the story, not all the water came from the rain. Some of it came from inside the earth as well.  The water on earth simply cannot account for covering all of Mt. Ararat, let alone Mt. Everest. 
Had there been a massive flood of this proportion, the geological record should show that the surface of the continents were washed off. That is not what we see. The geological record does not show any trace of a world wide flood.
The Egyptian and Chinese dynasties which existed during the time of the supposed flood show no signs of having drowned. They seem to have survived just fine.
Noah's arc should have been quite humongous to contain all the different species of animals. The plants and the marine animals that would have died with all the fresh water that poured in are left unaccounted for as well. It is worth repeating; that is also a lot of water with no source. The problem of a loving yet ruthless God also rears its ugly head.
The only rational conclusion to be made is that the great flood did not happen. It is just a myth.  To believe otherwise would be to believe in spite of a mountain of evidence to the contrary.
After the story of the flood, the stories of the Patriarchs Abraham, Isaac and Jacob follow. The book of Exodus traces journey of the Israelites, lead by Moses in their exodus from Egypt and slavery to their promised land of Canaan. After decimating the inhabitants of Canaan, the Israelites led by Joshua settle down to live their lives in the land flowing with milk and honey.
Unfortunately, there are problems here as well. There was a time when the Bible was considered to be historically accurate. Many an archaeologist has tried to find evidence for the Patriarchs and Moses. At this time however, the conclusion is that an exodus as described in the Torah probably never happened. There is no evidence to be found of a large crowd wandering the desert for forty years. The Egyptians never left a record for such an exodus of slaves. We have little or no evidence for the Patriarchs either. 
The creation in seven days is something that is best considered a creation myth, something the ancient people came up with. And the rest is also fanciful mythology. This however creates a problem in considering the Bible as the inerrant word of God.
There are Christian apologists who argue that the days in the creation accounts do not translate to literal days or 24 hour periods. They could just refer to a long time interval, even billions of years and the story would still work. Noah's flood need not have referred to a worldwide flood but just a regional one. The problem with this line of argument is that we have no reason at all to think that the seven days originally meant anything other than seven days. We also have about three millennia of teaching of creation in seven days. The order of creation does not make any sense (day and night before creating the Sun, for instance).
The people who wrote these accounts had no clue about a universe that evolved over billions of years. Not a clue. Trying to read that into the text is imposing modern science on to old mythical tales.
Given that evolution of life on earth and age of the universe are mainstream theories of science with a mountain of evidence, many Christians have moved to embrace these and meld them with religion.
Unlike its centuries long resistance to the Heliocentric theory, the Roman Catholic Church was quick to jump on to the Big Bang Theory bandwagon and pronounced it to be in accordance with the Bible. 
Many scientifically inclined Christians accept that much of the Old Testament is not historically accurate. Perhaps God only meant these to be allegorical. Perhaps the ancient folks could not have handled a complex theory of evolution and needed allegory!
The New Testament
But, the New Testament on the other hand, or so many say, is quite accurate. Unfortunately for the inerrantists (those that consider the Bible to be error free), there are many contradictions between the New Testament accounts as well as historical issues.
The Gospel of Matthew has Jesus born during the reign of Herod the Great which implies that it was before 4 BC; The Gospel of Luke places it during the governorship of Quirinius which puts it after 6 AD. 
Matthew, Mark and Luke have Jesus eat the passover meal on first day of the Passover and crucified the next day. (cf. Matthew 26:17, Mark 14:12, Luke 22:7). John on the other hand portrays Jesus as a perfect pascal offering and has Jesus dying on the day of the preparation of the Passover. (cf. John 19:14).
Matthew and Luke both have Jesus resurrecting after his crucifixion but have the details all different – the angels at the empty tomb, where Jesus and the disciples headed to, who saw the resurrected Jesus and so on. We have many many more inconsistencies. Who was Jesus' father Joseph's father? (cf. Matthew 1:16, Luke 3:23) What was Jesus' last words? (cf. Matthew 27:46, Mark 15:34, Luke 23:46, John 19:30). How did Judas the betrayer die? (cf, Matthew 27:5, Acts 1:18). What was Jesus' and his parents' home town? Bethlehem? (cf. Matthew 1:18-2:2) Nazareth? (cf. Luke 2:4) or Capharnaum? (cf. Mark 2:1, Matthew 9:1). How many times did the cock crow?
I have written more about it here and here. The New Testament is clearly not innerrant. What what God thinking, inspiring these Gospel writers to write such varying accounts? Did God not care about the details? How do we go about deciphering God's intentions with all these confusing details?
Religion often has the holy scripture as its foundation. Scripture is how we get to know how and why God created us and how God wants us to live (scripture and revelation, actually). But once we realize that scripture is errant and man-made, we are on the road to leaving our religion behind.
 Gallup.com, Four in 10 Americans Believe in Strict Creationism (2010)
 Stephen Hawking, "A Brief History of Time: From the Big Bang to Black Holes", Bantam Books (1988).
 BibleInterp.com, "Forget about Noah's Ark; There Was No Worldwide Flood", Robert R. Cargill, (2010)
 Israel Finkelstein and Neil Asher Silberman, "The Bible Unearthed: Archaeology's New Vision of Ancient Israel and the Origin of Its Sacred Texts", Touchstone (2002).
 The proofs for the existence of god in the light of modern natural science: Address of Pope Pius XII to the Pontifical Academy of Sciences, November 22, 1951.
"In fact, it would seem that present-day science, with one sweeping step back across millions of centuries, has succeeded in bearing witness to that primordial "Fiat lux" uttered at the moment when, along with matter, there burst forth from nothing a sea of light and radiation, while the particles of chemical elements split and formed into millions of galaxies."