http://vimeo.com/24752114

1. – Think of the way a violinist or cellist moves their hand back and forth on the neck while playing a note.  On the guitar this is the most subtle type of vibrato. The idea is to keep the finger firmly pressing down on the note/string while moving the fretting hand back and forth or left to right. Changing the speed of the movement changes the speed of the vibrato. I use this type of vibrato for soft passages and for long tones, not short, staccato notes.
2. – This is the most popular type and takes the longest to do well. Here’s the catch. With this type of vibrato the idea is to holdonto the fretted note/string and move the hand back and forth bending the string steadily. Anchor the base of the index finger to the neck. What beginner students do is move the fingers instead of the hand, which sounds like a spring going “boing”. It will never sound good or express the desired feeling.  

  There are 2 aspects of vibrato that must be mastered.   A)   The speed at which the pitch changes. i.e. slow – fast B)   The width. i.e. how much does the pitch change.          Practice these variations: slow and wide Clapton (bluesy and soulful) and fast and narrow (B.B. King).  The last thing to master is applying vibrato while bending a note. This is the most difficult but it’s powerful. When bending a note it’s important to first establish the pitch and then add the vibrato, not the other way around. Ever hear a opera singer or violinist with such a constant vibrato that you can’t really hear the exact pitch? Nasty stuff. There are many types of vibrato. Angus Young and Jimmy Page are 2 guitarists that have a vibrato when they bend a note that is distinctly British (o.k. Angus is Australian). Angus uses it half way through his solo on You Shook Me All Night Long and Led Zeppelin’s Since I’ve Been Loving You. Also, listen to the solo in All Right Now by Free. There’s soulful vibrato, 60’s San Francisco vibrato, of course all the many blues players have there own sound.   Finally and mysteriously to me I’ve never heard 2 guitarists with the same vibrato. It is a unique stamp on a person’s playing in much the same way that no 2 voices are the same. Listen for different types of vibrato in music and you’ll find the ones that appeal to you. Use different types of vibrato for different styles of playing and you’ll sound like a seasoned player.

Here's another view from the great bassist Marcus Miller. He said about one of the players in his current band, "he has the whole thing; tone, technique and passion, most musicians are missing something." I interpret the word "passion" as inspiration because passion doesn't always translate into something inspired but inspiration is always passionate.When something is inspired people connect to it. That's why something as easy as playing the blues can be very difficult. No matter how much you know, if blues is not inspired it falls flat and it can leave you standing naked!