The other day, I heard the following in a television advertisement: "I was literally falling asleep at the wheel." It was a woman talking about how her car saved her life when she began to fall asleep at the wheel. Is the word "literally" appropriate in this context? It is. The word "literally" should be used only when two conditions are satisfied. First, the expression in question is often used nonliterally, i.e., figuratively. Second, it is being used literally on this occasion.
We often use "falling asleep at the wheel" nonliterally. We say, for example, that the umpire who missed a call (especially in an important game) fell asleep at the wheel, or that President Obama fell asleep at the wheel by not imposing a no-fly zone on Libya before Muammar Gaddafi slaughtered many Libyan citizens/subjects. Since the woman in the advertisement was speaking literally about falling asleep at the wheel, her interjection of "literally" was appropriate.