Thanks Barb_D but I wasn't talking about a webpage - my cite was from Merriam-Webster's dictionary of English usage. Here is the link:
Merriam-Webster's dictionary of ... - Google Books
I think the important point here is that in many situations using the word "literally" as an intensifier is not at all confusing. To take an example from my link, the phrase "They will literally turn the world upside down..."
clearly uses the word "literally" as an intensifier and I can't see how this is at all confusing in this situation. No sensible person would interpret that as meaning that the world's axis somehow shifted!
I said earlier that I agreed that it was unfortunate that the literal meaning of "literally" was being confused. But I have changed my mind - it is not really a problem, so long as people are clear in their use, and don't use it when there is potential confusion.
Go back to the example of "really". It is used by most native speakers of English as a general intensifier but also means "literally" or "in fact". It is quite a common word, yet it does not seem to be a common source of confusion. So what is the problem with using "literally" in a similar way? As long as you are careful to avoid ambiguity (in the same way you must be when using "really"), there is no problem. SoothingDave, does the use of "really" in this way bother you? Do you often have trouble conveying the idea you mean something literally and not figuratively?
Here is a link to a Slate article about this issue, if you are interested:
http://www.slate.com/id/2129105/
Raymott, on what do you base your claim that people are using the word incorrectly? Furthermore, there are many words which can be their own opposite - they are called auto-antonyms. They don't usually cause problems for proficient users of English because meaning is established through context and convention.
http://people.sc.fsu.edu/~jburkardt/fun/wordplay/autoanto.html
ETA:
I found this quote from Frank Zappa. It shows how "literally" has not lost any of its meaning, despite also being used as an intensifier:
"The most important thing in art is the frame. For painting: literally; for other arts, figuratively--because, without this humble appliance, you can't know where The Art stops and The Real World begins."
Clearly, he is using "literally" to mean "not metaphorically". So don't worry about the meaning being confused!