I the Koran subject to interpretation or to be taken literally?

I'm curious why you raise this question only with respect to the Koran--and not with respect to other sacred literatures (or perhaps you have them all in mind). I'm no expert on the Koran but I am pretty sure that, first, your question has a false dichotomy: "interpretation" is a matter of determining the meaning of a text (or of a speaker), and sometimes the meaning you settle on is what might be called a literal one, so interpretation CAN itself be literal in nature. Presumably what you have in mind then is a different contrast--between metaphorical or symbolical interpretation v literal interpretation. But even there I would imagine (said without claim of expertise) that the Koran is filled with much symbolic/metaphorical language, not least because ordinary (non-sacred) speech is itself filled with such; it's rather hard to imagine a text in which every single sentence is possessed (or meant to possess) only literal meaning. THAT said, perhaps your question is actually a little different, something on the order of, "Are passages in the Koran legitimately subject to divergent interpretations, some more literal, some less literal, etc.?" And here again as a non-expert I would imagine that that is a question itself under debate by those whose lives are devoted to interpreting the text--that the many different branches/sects/denominations of Islam (like the different branches of all major world religions) may well be generated by divergent interpretations of the same text. To determine whether (all) those divergent interpretations are equally legitimate is thus to determine just which branches/denominations are the legitimate ones--a question that probably shouldn't be left to the philosophers likely reading this website, but to specialists in Islam/Koran etc. (The last thing I'll offer, as a non-expert, is that to be sure any text is subject to multiple interpretations, and sacred texts seem to be particularly rich in multiple interpretability--but what you're asking for in effect are criteria for determining which of the many possible interpretations are "legitimate" or "correct"--a question that probably cannot be answered in the abstract.)

hope that helps!
Andrew

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