How do people who use the Bible as a bases for their Christianity decide what is literal and what is not?
It is really a game of self-deception.
Is there a useful way to categorise literal verses from metaphorical?
They claim that the Bible is literal and inerrant. But "inerrant" is what they consider most important.
Where the Bible disagrees with what they want to believe is true, they will take that text as symbolic in some way, because that allows them the maintain their illusion of inerrancy.
Where the Bible agrees with what they want to believe is true (or disagrees with what they want to believe is false), they will take it as literal.
Fundamentalism - the anti-American, anti-Christian branch of American Christianity