"The day will come when the mystical generation of Jesus by the Supreme Being as his father, in the womb of a virgin, will be classed with the fable of the generation of Minerva in the brain of Jupiter."  - Thomas Jefferson

Some common observations:

The virgin birth story was inspired by the Hebrew Scriptures:

Throughout the Old Testament, we hear of the very unusual births of Ishmael, Isaac, Samson and Samuel. Usually prior to the birth, an angel appears to an individual; the latter is afraid; the message of an upcoming birth is given; objections are raised; and a sign is given. Matthew and Luke could have replicated the essence of these stories, and added a virgin birth as proof that Jesus' birth was not only unusual, but was a miracle. This would establish Jesus at a much higher status than the four famous figures from the Hebrew Scriptures. Without a miraculous birth, Jesus might have been considered to be lower in stature to those heroes from the Hebrew Scriptures.

The virgin birth story was an honest mistake: Most liberal theologians believe that the author of the Gospel of Matthew (or someone who supplied the writer with source material) scanned an unknown ancient Greek translation of the Hebrew Scriptures. He found what he believed to be a reference to Jesus' birth. It was in Isaiah 7:14 (listed above). This has since become a famous passage; it is often recited at Christmas time. He simply copied it into Matthew (1:23) as a method of showing that prophecies in the Hebrew Testament were fulfilled in Jesus' life.

As it happens, the Greek translators had made a mistake. When they were translating the Hebrew writings into the Greek Septuagint and similar translations, they converted the Hebrew word "almah" as the Greek equivalent of our English word for virgin. "Almah" appears 9 other times in the Hebrew Scriptures; in each case it means "young woman". When the scriptures referred to a virgin (and they do over 50 times) they always used the Hebrew word "betulah". 7 So, Isaiah appears to have referred to a young woman becoming pregnant (a rather ordinary event).

Some English translators are accurate to the original Hebrew:

Other translations completely mistranslated the Hebrew and referred to the woman as both pregnant and a virgin; that is, a miracle had occurred. This avoids the conflict that would otherwise occur between Isaiah and Matthew 1:22-23. (The author of Matthew quoted Isaiah as describing a virgin who was pregnant before becoming sexually active):

Other translations went part way. They mistranslated the Hebrew and said that the woman had been a virgin. However, they imply that the woman might have been a virgin, who engaged in sexual intercourse and then became pregnant:

Some versions are vague and can be interpreted in many ways:

The birth being discussed in Isaiah 7:14 appears to be unrelated to Jesus. It describes the Syro-Ephraimite invasion of Judah and the siege of Jerusalem  about 735 BCE. The child that was born to the young woman at the time was a sign from God that the siege would be lifted and that Jerusalem would continue as before. The prophecy was presumably completely fulfilled more than 700 years before the birth of Jesus. For King Ahaz circa 735 BCE, "the birth of the Messiah some seven hundred years later would have been of little consolation!" 8 For another analysis of this passage, see Reference 9.

The Writers of the Gospel of Q are Silent on the Virgin Birth: The Gospel of Q was an early gospel, which was written about 50 CE and later expanded. No copies have survived, but the original text has been pieced together through theological research. It says nothing about the virgin birth. This is a possible indicator that the early followers of Jesus did not hold that belief. If they knew of such an important miracle, they would probably have included some mention of it.

The Writer(s) of the Gospel of John imply a normal Birth: Some liberals believe that the Gospel of John was written by a group of authors. The writer(s) did not mention the virgin birth. They must have aware of the belief, since the Gospels of Mark, Matthew and Luke would have been widely circulated  for 5 to 15 years by the time that the Gospel of John was written. They seem to have rejected it as being a false teaching. In John 1:45 they refer to Jesus specifically as "the son of Joseph." John 6:42 has the townspeople: "Is this not Jesus, the son of Joseph, whose father and mother we know?" If the author(s) believed in the miracle of the virgin birth, he/they would undoubtedly have mentioned it somewhere in the gospel.

The Writer(s) of the Gospel of Thomas is Silent: Many theologians believe that this Gospel was originally written about the same time as Mark, about 70 CE. It was in wide use among various Christian communities at the time, but never made it into the official canon. It is also silent about any miracles associated with Jesus' birth. However, its silence is not proof that the virgin birth was unknown to the author(s). Thomas is a "sayings gospel" which deals primarily with the parables and conversations of Jesus.

In conclusion the most likely scenario, as interpreted by many liberal Christians is: