This is a subject that I haven't really made my mind up about yet, because there is no conclusive evidence, but I'll have a crack at it anyway.
There are three main things to take into consideration when analysing the idea that Jesus was mythical. First, that there are no secular sources that mention a miracle-working Jesus (I've dealt with Josephus before). Second, that the earliest Christian writings (Paul's Epistles) do not provide any evidence for a recent historical Jesus. Lastly, that many aspects of the Jesus story have close parallels in other Middle-eastern religions, with stories about messiahs, dying gods, which Christian apologists have tried to explain-away since the beginning of the religion. In the second century C.E. early church fathers were dealing with criticisms that their religion had plagiarised the pagan religions, and their primary response was that Satan had anticipated Christianity, and copied aspects of it to make it look like Christianity had copied paganism. This is one of the most pathetic defences of any religion that I've ever seen.
In my last post I mentioned that the fingerprints of oral tradition, aka. folklore are smeared all over the gospel accounts. It has been suggested by apologists that the contradictions between the four gospel accounts are evidence that they're true, which I find ludicrous. That argument could possibly be used if the accounts were written down by eye-witnesses, because people often make mistakes in their observations. However, the gospel accounts were not written by eye-witnesses, quite far from it in fact. Depending on which gospel you look at, we're talking between 2 and 4 generations passed between the alleged death of Jesus and the time the gospel was written down. I find it quite absurd to suggest that the gospel accounts we have written down, were passed down orally through 2-4 generations and then written down in more-or-less the same form. I find it far more reasonable that the variation arose from many decades of telling the same basic story. We have no indication of when the original story arose, or what that story even was, as there is no archaeological evidence to support the Jesus story, and many aspects of it are quite plainly fictitious. The gospels themselves place the Jesus story at contradictory places in history, which to me seems to be an attempt by each of the authors to place a myth within a historical context.
There seems to be 4 common views of the historicity of Jesus, I find 3 of them plausible.
1: Jesus never existed.
2: Jesus existed, but we can't know anything about him, due to the contradictory nature of the sources.
3: Jesus existed, and we can discern some core ideas about his identity, but he is not the same Jesus as the gospels portray.
4: Jesus existed, and the gospels portray him accurately.
1-3 I find all equally viable explanations, number 4 however seems to ignore the evidence. This is unfortunately the position that the majority of lay-Christians hold to, probably because they really don't know much about their own religion.