Culled from: http://www.christianitytoday.com/iyf/hottopics/defendingyourfaith/why-believe-bible-true.html
What exactly is the Bible?
The Bible is the collected writings of people who knew God over many centuries. But more than that, as Christians we understand that God has spoken through these people.
Some Bible books recite what God has done in people's lives—like 1 and 2 Kings. Other books, like Isaiah, show God speaking directly to us through the voice of a prophet. Isaiah doesn't just reflect on his personal experiences with God. He speaks for God, and God actually speaks through him. And the New Testament Gospel writers have Jesus speaking directly to us.
How did the Bible come about?
Centuries ago, Jews and Christians had to settle which writings were inspired by God and which weren't. But there were many more writings floating around than we now have in our Bible.
The Jewish community met about A.D. 90 to decide which writings were authoritative. The books of Moses? No question. The great prophets? No debate. But other books were discussed more. The collection of writings that was selected is what we now call the Old Testament.
Christians had a harder time coming up with the New Testament, because early Christianity was an underground movement; Christians couldn't even hold public meetings until the 4th century. But 2nd-century bishops (overseers of groups of churches) were already writing to individual churches saying, "Read these books, don't read those books"—even before there was an "official" New Testament. So, there were already books considered authentic and books considered fraudulent.
How did the church decide which books were authentic and which were frauds?
It boils down to two issues: historical credibility and spiritual benefit.
Historical credibility simply means asking, "Does an apostle—one of the 12 disciples or Paul, for instance—stand behind this writing?" Matthew was an apostle, and he was with Jesus, so his book holds a lot of weight. Mark wasn't an apostle, but he worked with Peter, and Peter was with Jesus; that's why Mark's book holds weight.
Many books claimed "apostolic connection," but some of those claims—like the Gospel of Thomas—were fraudulent. Which brings up the spiritual benefit issue. Wise bishops in the early church examined these writings and asked: "Is Thomas really the author? Does this writing reflect the spiritual and theological commitments of the other books?" With the Gospel of Thomas, the answer was "no" on both counts.