"All Scripture is breathed out by God and profitable for teaching, for reproof, for correction, and for training in righteousness, that the man of God may be competent, equipped for every good work."The phrase "breathed out by God" is often translated "inspired by God."
I recently came across some literature that offered four different ways to believe that the Scriptures are inspired by God.
1) God chose and inspired the very WORDS found in the Scriptures. This means the words found in Scripture are exactly the ones that are supposed to be in there. There are no words that snuck in that God would have preferred be left out.
2) God chose and inspired the WRITERS of the Scriptures. This means that God's Spirit moved the writer to write the Scriptures but that he didn't micromanage. So in this view the words themselves are the words chosen by writers, not the words chosen by God.
3) God inspired the IDEAS expressed in the Scriptures.
4) God guided and inspired the COMMUNITY that pieced together/produced the Scriptures.
When I saw these different explanations it seemed like all of these might be reasonable ways of understanding how the Scriptures are inspired by God. Then I realized that all but the first one reject the authority of the words themselves. If we can say that God motivated or inspired the writers, ideas, or community, then we can reject certain words that Paul or Peter wrote as not being inspired by God.
More than that, these last three views allow us to say that Paul or Peter didn't even write books that claim to be authored by them, but that God just inspired a "Petrine community" to produce material that sounded Peterish and to put his name on it.
The first view is known as the verbal inspiration of Scripture. When we say that the Bible is the "inspired and inerrant word of God," we're saying that he inspired the words themselves. This is what I believe.