In the book Translating Truth — The Case for Essentially Literal Bible Translation edited by Wayne Grudem, conservative evangelical scholars who taken on the topic of Bible translation, and especially the translational philosophy underlying the entire enterprise of Bible translation.
Here is an excerpt from the first chapter by Wayne Grudem on why we should use essentially literal versions such as the ESV, NSB, NET, HCSB (and I would add NKJV) rather than the dynamic equivalent (or 'functional equivalent') versions such as NIV, TNIV, NLT, LB, Ph, Msg, CEV etc.
... I know I cannot teach theology or ethics class using a dynamic equivalence translation. There are too many details of meaning missing, details that are often important for theology. And there are too many details added, details that will lead people down paths of thought that are not part of God's Word.
Although the NIV is not a thoroughly dynamic equivalence translation, there is so much dynamic equivalence influence in the NIV that I cannot teach theology or ethics from it either. I tried it for one semester several years ago, shortly after the NIV first came out, and I gave it up after a few weeks. Time and ago I would try to use a verse to make a point and find that the specific detail I was looking for, a detail of wording that I knew was there in the original Hebrew or Greek, was missing from the verse in the NIV.
Nor can I preach from a dynamic equivalence translation. I would end up explaining in verse after verse that the words on the page are not really what the Bible says, and the whole experience would be confusing and would lead people not to trust the Bible in English but to distrust it.
Nor can I teach an adult Bible class at my church using a dynamic equivalence translation without checking the original language at every verse. I would never know what words to trust or what words have been left out.
Nor can I lead our home fellowship group using a dynamic equivalence translation. People have sometimes brought a New Living Translation or The Message to a Bible study and I've seen them get excited about seeing some new ideas in a verse, but I have to bite my tongue because I know that the new idea they see in the verse is not there in the Greek or Hebrew text. I don't want to discourage their excitement about contributing to the Bible study, but I just wish they would be excited about something that is actually in the Word of God.
Nor would I ever want to memorize passages from a dynamic equivalence translation. I would be fixing in my brain verses that were partly God's words and partly some added ideas, and I would be leaving out of my brain some words that belonged to those verses as God inspired them but were simply missing from the dynamic equivalence translation.
But I could readily use any modern essentially literal translation (especially the ESV, NASB, NET BIBLE, and HCSB) to teach, study, preach from, and memorize. The wording may differ slightly, but the words are all there and the meaning is all there as completely as it can be expressed in English.
What then can I do with dynamic equivalence translations like the New Living Translation or The Message? I can read them like I read a commentary, not thinking of them as exactly the Word of God, but as a fresh and creative way to convey an explanation of the verse or an interpretation of the verse as understood by some very competent evangelical scholars. I think of these versions as skillful free interpretations of Scripture, but not strictly as translations.
[Wayne Grudem, Chapter 1: Are Only Some Words of Scripture Brethed Out by God? in Wayne Grudem, Translating Truth — The Case for Essentially Literal Bible Translation (Crossway, Wheaton, IL, US, 2005), 49-50]
I concur with Grudem's position on this topic, except for the use of the dynamic equivalence interpretations of Scripture. While some like the TNIV or the NLT may be able to function like reasonable good commentaries, those that are too loose in translations like the Message IMO cannot, since they ideas they add oftentimes distort the Word of God. Not to mention the LB per se which is Arminian as it "re-interprets" the texts of Scripture to reflect the theological bias of its
writer 'translator' Kenneth Taylor.