Choosing a Bible Translation

Before the year 1881, you had three choices for an English Bible translation: the KJV, the KJV, or the KJV. Obviously, this is no longer the case. How did the King James Version get dethroned? Which translation is best today? Are any of the modern translations faithful to the original?
What is a Faithful Translation?
Many people today think that a faithful translation of the Bible means a "word-for-word" translation. If the original has a noun, they expect a noun in the translation. If the original has sixteen words, they don't want to see seventeen in the translation. This type of translation is called "formal equivalence." The KJV, ASV and NASB come the closest to this ideal.
On the other end of the spectrum is a "phrase-for-phrase" translation, also known as a "dynamic equivalence" or, more recently, as a "functional equivalence" translation. A dynamic equivalence translation is not as concerned with the grammatical form of the original language, as it is with the meaning of the original. It allows more room for interpretation and is easier to understand. The NIV and the NEB follow this philosophy.
The Difficulty of Translating a Language
Anyone who has learned a second language knows that a word-for-word translation is impossible much or most of the time. Idioms and colloquialisms in a language need to be paraphrased to make sense in another language.
Even the KJV translators realized this. In a couple of places in the Old Testament, the Hebrew text literally reads, "God's nostrils enlarged." But, the KJV translates this as, "God became angry"—which is what the expression means. In Matthew 1:18 the KJV says that Mary was found to be with child. But the Greek is quite different and quite graphic: "Mary was having it in the belly!" In many places in Paul's letters, the KJV reads, "God forbid!" But the original has neither "God" nor "forbid." Literally, it says, "May it never be!" (as most modern translations render it).
Therefore, when we speak of a translation being faithful to the original, we need to clarify the question: Is it faithfulness to form? Or, faithfulness to meaning? Sometimes faithfulness to one involves lack of fidelity to the other. There are problems with each of the translation philosophies. The KJV, with its attempted fidelity to form, does not make sense in some passages. (In 1611, these instances did not make sense either). Likewise, The NASB often contains wooden, stilted English.
On the other hand, functional equivalence translations sometimes go too far in their interpretation of a particular phrase. The NIV, in Eph 6:6, tells slaves to "Obey (their masters) not only to win their favor." However, the word "only" is not in the Greek, and I suspect that Paul did not mean to imply it either. This reveals one of the problems with dynamic equivalence translations: the translators don't always know whether their interpretation is correct. The addition of one interpretively-driven word can change the entire meaning of a clause or a passage.
Some versions don't interpret—they distort. Some are notorious for omitting references to Christ's blood, or for attempting to deny his deity. In these instances, the translators are neither faithful to the form or the meaning. They have perverted the Word of God.
Yet, functional equivalence translators who are honest with the text often make things very clear. In Phil 2:6, for example, the NIV tells us that Jesus was "in [his] very nature God." But most formal equivalence translations state that he was in the form of God. The problem with these formally correct translations is that they are misleading: the Greek word for "form" here means essence or nature.
A formal equivalence translation lets the reader interpret for himself or herself. However, the reader often does not have the background information or the tools to interpret accurately. The net result is that he or she runs the risk of misunderstanding the text, simply because their translation was not clear enough.