The Old Testament has different literary styles of writing. One primary style is historical narrative.... which is just as it sounds a narrative of the history of the events. Muslims don't have anything like this in the Qur'an and so they have a hard time understanding why horrific stories could be in a holy book.
This gets into a bigger discussion about the nature of revelation. Christians believe that the scriptures were written as prophets were "inspired" by the Holy Spirit utilizing their distinct personalities and literary styles.
We don't believe that God bypassed the prophets intellect and somehow had the prophet write s word-for-word dictation. But this is exactly what Muslims believe. They believe that Muhammad's intellect was completely removed from the equation and that he went into these ecstatic prophetic rants speaking the perfect and pure words of Allah. So we will always have some work to do to destroy the fantasy that the Qur'an is perfect while the Bible is corrupted. I think we must help our Muslim friends look at things historically objective and then come to a conclusion which book is really from God.
We need to help our Muslim Friends understand that God was not affirming the wicked violent or immoral stories present in the Old Testament but rather they are included so that we can learn what NOT to do. (1 Cor. 10 makes this abundantly clear). Muslims will say that David and Solomon had more than one wife and so that its ok that Muhammad did... But God never affirms polygamy but makes concessions for it; just as He did for divorce. (i.e. Exodus 21:10). Deut. 17 tells us the kings were NOT to multiply wives.
We must help our Muslim friends understand that God's plan for marriage started in the Garden between 1 man and 1 women. Polygamy was culturally acceptable in the ancient world but post exile Jews stopped this practice because they realized that God's plan for marriage was perverted when a man took multiple wives. Here is a good article on the subject. http://www.letusreason.org/Biblexp75.htm
Muslims don't like sinful people being used as prophets and so when they read of David and the rest of the prophets committing sin they want to throw away the bible. However, we must show them that the truth of history being recorded gives us great confidence that the scriptures are noting trying to present a skewed whitewashed picture of those in the scriptures. The reality is that all those in the bible are shown to be sinful, weak, broken, humans but that God can still use them to help accomplish the story of redemption.
Muslims often bring up the conquests of Joshua in response to questions about the early Islamic conquests. First, of all Joshua was commissioned by God to destroy seven Canaanite nations because their sin had reached its fullness (God was previously patient with them in Genesis 15). God was very clear that this conquest was limited to a very specific geographic region and to very specific people (Can we say this about the early Muslim conquests?... ummm no). Second, this is the old covenant. We don't follow Joshua's example, you can explain to a Muslim that the civil and ceremonial laws of the old covenant have been "abrogated" by the new covenant (take them to the sermon on the mount). Muslims typically do not understand the progressive nature of Christian revelation revealed through the dispensation of covenants. (No Christian thinks he should follow Joshua's example). We follow Jesus not Joshua. Muslims have a bigger issue because all the violent verses found in the Qur'an (i.e. suras 8-9 abrogate (replace) any peaceful verses in the Qur'an. (The final marching orders in the Qur'an can be found in Sura 9)
We don't need to try to explain away the old testament stories.... we need to affirm, "yes these stories are horrible" and then help Muslims understand how the whole of the old testament is to show the fallen sinful nature of humanity and our need for a savior. Islam doesn't believe that humanity is fallen or sinful by nature, so we can use these stories as well as the sermon on the mount to ask the Muslim if they have ever gone 1 day without sin?!? If they have gone 1 hour without sin??? Once they see how sinful they really are then they can see that their situation is hopeless.... there is no way there good deeds will outweigh their bad on the day of judgement.
They long for a sinless man who has the perfect message... this is a great launching point to share Jesus the perfect sinless God man!