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First you need to understand WHAT the Talmud is. It is not actually a book on its own but rather an amalgamation of the Mishnah (Oral Torah) and Gemorrah (commentaries on the Mishnah). In modern editions we also have various commentaries from the Rishonim (the Rabbis in the period Cloe to the time after the Gemorrah was sealed) in the margins, headers, footnotes and appendices.
So, in reference to your question:
1) The Mishnah is seen as coming directly foam G-d; being given at the same time as the written Torah was given to Moshe
2) The Gemorrah is discussiob, case studies, ethic and moral tales, legal rulings etc based on the Mishnah
3) The commentaries are just there to help us understand the Mishnah and Gemorr better and to highlight the core principles so we can understand them better when we need to use the principles to make a decision on something not covered directly within the Talmud.
Why is it respected? Well- first it has the Mishnh directly from G-d, then it has the discussions and commentaries of Rabbis from a time period when a lot more knowledge was available. We can only learn from them and not contradict them for a very simple reason: we do not have the knowledge and resources they had. Unfortunately throughout the Talmud we see references to books and source that we no longer have with them being lost during the period of exile. As such, the Talmud does NOT develop- it is a static document that does not alter. All that we do nowadays is study it to know how to apply it, and then apply its principles to new situations and scenarios
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