We use literally to express the reality of the situation, opposed to an expression, or an image: ''my father will kill me !'' it is an exaggeration, he will never do it. opposed to: ''he literally wanted to kill me'' he had a real plan to kill me, it was not a joke. or "I have frozen fingers !" I have really cold fingers opposed to: "His fingers were literally frozen so had to be amputated." Unfortunetly, his fingers were really frozen.

This online dictionary gives both definitions and examples: http://www.thefreedictionary.com/literally