I was listening to an episode of Dan Carlin's Hardcore History last night, and he made a point to mention that when Luther translated the Bible into German, he bypassed Latin and translated from Greek. As a member of the clergy, presumably Martin Luther spoke Latin, and could have translated the Latin version into German. What was the significance of translating directly from Greek?
Another way of asking the same question, but if somebody translated the Bible from Latin into German at that time, would that version and Luther's Greek-to-German version have differed? If so, how?
To give you an idea of how this is a bit complicated, your last question needs to be clarified: "Which Latin Bible?" :-D
By the time that the Reformation was starting, most Latin (read: Roman Catholic) churches relied on the 4th century Vulgate Latin translation of the Bible called the Vulgate Bible. The Old Testament was originally mostly Hebrew, while the New Testament was originally Greek. Both were translated into Vulgate Latin by St. Jerome in the 4th century.
The 15-16th century saw the re-discovery of many Greek manuscripts of the New Testament. Cardinal Cisneros of Spain (Castille) ordered the Complutense University to work on re-constructing the Bible based on these manuscripts and then to provide new improved Latin translations to be consistent with the rediscovered Greek text. Erasmus did the same at around the same period.
Early versions of both of these contained Hebrew, Greek, (improved) Latin as appropriate, such that the learned readers may compare and see the translations.
What Luther did in 1522-34 was to use the Erasmus version as a starting point, and used the Greek text to translate directly to German.
The Vulgate Bible had been the one used by the Latin (Roman Catholic) church since the 4th century, so many viewed these newer translations critically. In particular, Erasmus' version was seen to have deviated from the official doctrine. An important example is whether a word should be translated to "do penance" or "come to one's senses" when John the Baptist was crying out in the wilderness (Matthew 3:2). This was a rather big deal at the time, what with the criticism of Catholic church's use/sale/abuse of indulgences. Was it necessary to formally do penance or was it sufficient to come to one's sense in a personal way? Inquiring minds of the time truly wanted to know and they wanted to argue.
In 1590-1591 during the Council of Trent, it was determined that the original Vulgate Bible was to be the official bible of the Roman Catholic Church.
Source: The Reformation by Diarmaid MacCulloch.