What are your thoughts on the tower of Babel; particularly on its historical reality? And also on the topic of the different languages? How should we interpret this?

I believe that the Tower of Babel story is semi-historical.  What I mean by this is that I believe that there was an actual city, that its name was almost certainly Babel, and that they built a great monument to their own glory.  I also believe that God saw this and that he thwarted what they were doing in some way, and that their hegemony was somehow ended, producing a spreading out of peoples, a division into multiple political units and even a proliferation of languages.

However, I also believe that the account is somewhat mythologized/fictionalized—that we ought to be a bit cautious about the exact details because this was a truly ancient story by the time it was recorded, and it is recorded, not to give a precise, scientific account of historical events, but to tell a story about humans and their interaction with God.  For example, the story seems to imply that there was literally only one language before the tower fell, and that all languages descend from that one language.  I highly doubt this detail to be true, and the linguistic evidence does not seem to support it.  This is part of the mythology of the story, but the core events are actual ones, like I said I believe.

The main thing we should do with this story is understand what it tells us about God, what it tells us about ourselves, and what it tells us we ought to do about this.  This is, after all, a fully inspired biblical story.  Concern about whether every single detail is completely historical should not be our main focus, although it is fair to ask the question.