For most Muslims, the hadith contains an authoritative exposition of the meaning of the Qur'an. Islamic law is derived from the acts, statements, opinions, and ways of life of Muhammad. Traditional Muslims believe that the transmission of the Hadith is entirely accurate and without flaw (see note at end). However, this is difficult to reconcile with the fact that different compilers found different numbers of hadith to be authentic, and only to varying degrees.
The Hadith literature, as a whole, was handed down orally until the mid 700s (less than 100 years after Muhammad and his companions), at which point collections of Hadith were written and later edited. This process was called isnad, or "backing", describing the editorial reduction, and it took two forms:
As the oral law is to Torah in Judaism, the Hadith is to the laws of the Qur'an in Islam. The Hadith is the authoritative interpretation of the Qur'an, even where the current practice is at odds with the plain meaning of the text. Islamic law has some flexibility as some traditions of the Prophet were considered nullified by later sayings of him.
Over time, due to different social, religious and political considerations, many hadith collections developed. A consensus of Islamic scholars weighed various collections, and judged them to be in one of the following categories: "genuine" (sahih, the best category), "fair" (hasan, the middle category), and "weak" (da'if).
By the ninth century six collections of hadiths were accepted as reliable by Muslims, although they varied in how many they considered authentic: al-Bukhari (d. 870) accepted 7275, while Abu Muslim (d. 875) accepted 9200. The other four well known and widely used colltions are those of Abu Da'ud (d. 888), al-Tirmidhi (d. 892), al-Nasa'i (d. 915), and Ibn Maja (d. 886). More compilations have developed over time, but these six hold the greatest weight.
One reason they have been so carefully examined, and why strict consensus on authenticity of each has not been possible to the present day. Very often, specific hadith have been used to justify specific cultural practices, e.g. of Islamic banking or consensus decision making, and fiqh, which are not necessarily mandatory to Islam and change with the times (al-urf).
As an example of how contentious this can be, the exhortation to "let those who are small in number salute those who are large in number", along with the observation that Muhammad did not appoint but directed his followers to select their own leader, has been interpreted in both early Muslim philosophy and modern Islamic philosophy as being an endorsement of some form of democracy, or "the ijma of the umma" not merely of the ulema (scholars, jurists). This demonstrates also the importance of Muhammad's actions as reported in the sira and not just his sayings, the hadith.
Since scholars and jurists have a conflict of interest in reporting accurately any hadith that would limit their power, and a like conflict in promoting hadith that elevate the learned or the scholarly or the scientific method of reason they prefer, it is difficult to tell how the selection and interpretation of the hadith altered Muslim civilization and today affect the Islamic World. This is of great interest to scholars.
On a more practical level, daily life of Muslims relies also on sira or the stories that constitute the biography of Muhammad. As the sunnah consists of both sira and hadith, a Muslim may consult either before choosing actions.