Strangely enough, I picked up a book the other day for no other reason than it caught my eye and the first paragraph looked amazing. This book, Hal Duncan's Vellum, is a masterpiece of the highest order, however I am actually not going to discuss that here right at the moment (mainly owing to the fact that I have not finished reading it or its sequel Ink). What I did want to address was something that Mr. Duncan uses frequently: mythology.
There is a school of thought that there are a finite number of stories, and that any tale will essentially be a retelling of one of those stories, only with slightly different trappings. This is likely true, however I like to think that the concept of mythology, and the way it explores the human condition through epochal story, works on a slightly different level.
One example of mythology writ large in fantasy was the 2000 edition of Gilgamesh written by Stephen Grundy. This retelling of the ancient epic of Gilgamesh and Enkidu was interesting (though I personally found the constant references to the vulva of Ishtar a bit distracting), but in the end did little other than tell the story in prose (oh, yeah, and use 565 pages to tell a 100 page story).
On the science fiction side, we have Fred Saberhagen's Books of the Gods, a series of novels that explore the idea of some strange future where super-technological masks transform normal people into the avatars of 'gods' to act out their parts in retellings of myth. It is made very clear from the outset that this is supposed to be technology and not magic, but as has been oft said: there is always a point at which technology is indistinguishable from magic.
Wending our way from 'pagan' to 'judeo-christian' mythology, we have Steven Brust's To Reign in Hell. This strange retelling of the revolt in heaven paints Satan, Lucifer, Lilith, Mephistopheles, and Beelzebub in a more sympathetic light, and shows that the revolt was really more of a misunderstanding fostered by one angel looking to save his own skin.
As you can see, these are just three things that come off the top of my head which show mythology alive and well in modern literature. We can add Neal Stephenson's Snow Crash,Timothy Zahn's The Green and the Gray, Kingsbury's The Moon Goddess and the Son, and all the works of C.S. Lewis to that mix, and we get a tapestry of constantly re-invented myths and legends. While some are faithfully retold, others wind their way through different conceptual ideologies or landscapes to transform themselves into something new and different. Eat your heart out Bullfinch.