The way I interpreted the original boardmail was that:
Book of Mormon is like Acts in that people are writing about first hand experience. Maybe Acts was a bad example, though.
Book of Mormon is not like Plutarch's Lives where the story is about a different people, recalling an oral tradition.
If the BoM was written like Plutarch's Lives then it might be OK to be inaccurate as a history because the prophets could plausibly assume the stories they write were accurate though they really weren't.
But the BoM is written like Acts (or maybe to be more accurate switch it to something like Corinthians), where the prophet/author is writing a first hand account of a story he was involved in.
Therefore, if you could definitely prove there was no such person as Nephi, that Jesus never visited the western hemisphere, and there were never a civilication existing of Nephites and Lamanites, it would definitely affect my testimony/view of the BoM. That's not to say I would crumble into apostacy, as you might come up with a plausible "Plutarch Lives" angle like Archaea apparently believes, and still fit it into your testimony of the restored gospel. But it would take some pondering to adjust my testimony that way, and it would be an adjustment.
That said, I have no problem with embellishments, like Pelagius' Mulekite example. It's common knowledge people lie about being a Mulekite. We used to do it all the time back in high school to get chicks.
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