Another accusation against Catholics is that they are 'idol worshippers' in the Church.
If we taken this word literally, God is prohibiting all arts and architecture in this world. All arts belong to images or likeness in the universe. In fact God forbade the worship of fake gods that existed at the pagan culture! They believed that the statues themselves are their gods, and made sacrifices for them. But GOd never prohibited the use of statues in the places of worship, which helped people to feel His Presence, as the Bible says.
God commanded to make Images
Ex.25:18-20 God said:"And you shall make two cherubims of gold; of hammered work shall you make them, on the two ends of the mercy seat." This is to0 create an awareness among the people about God's presence.
In 1Chr.28:18-19 David gives the plan of the temple to solomon: His plan for the golden chariot of the cherubim that spread wings and covered the Ark of the Covenant". When Solomon constructed that temple with statues, GOd blessed him and dwelt in that temple.
Ex:28:31 GOd commanded that Aaron's priestly vestments must be adorned with images. Num.21:8-9 God said to mosses " Make a statue of a fairy serpent and set it on a pole, everyone who is bitten when sees, will live" In all these places God made use of statues for religious purpose.
GOd revaels Himself in a visible form (daniel7:9) The Holy Spirit reveals Himself in a visible form of a dove(Matt.3:16) and tongues of fire (Acts.2:1-4) Christ is the visible image of invisible God(2Cor.4:6)
When God said not to bow before them, it meant not to worship them nor respect them as God(Fake god). Catholic devotees, who bow before a statue, are not worshipping them! When we bow before our National Heroes, does that mean we worship them? This practice varies from culture to culture. In Japan, India and some counties, bowing is used as an expression of respect!
The biblical meaning of idolatry is not prohibiting statues and paintings, but worshipping fake gods and commiting sins as St. Paul says: "Put to death the parts of you that are earthly: Immorality, impurity,passion, evil desires and that LUST that is IDOLATRY" (Col.3.5)
Early Christian tradition
Before the formation of the Bible, Christians in their churches used statues and pictures. The 4th century Historian Eusebius tells us that he had seen a statue of Christ 'arms outreached'(Church hitory, book 7 Ch:

The Catholic Church has the evidence from 150 AD onwards that the Christian decorated their tombs and catacombs with paintings of Jesus, Mary, dove cross, fish etc. Excavations for a new basilica at Nazareth brought to light a mosaic painting of Eucharist which dates back 63 AD. The oldest pictures of Mary and the child Jesus are found in the Catacomb of Pricillia in Rome, dating back 2nd Century. Even before the Bible formed, paintings and statues catechized people by reproducing the events in the Gospel!
And thats how it is!
Peace!