Okay, so, anyone looking to "shred" or anything of that nature has heard the term "legato" used quite frequently. But I find that most who come across legato playing tend to get the concept wrong. Oftentimes, we are told that there are two types of playing: picking every note and legato. Well, that is rooted in truth, but is still a misunderstanding of the concept of legato. And I have realized that it came down to this: people think legato is a technique, but it is not. It is a SOUND. The term "legato" translates to "tied together", hence, in legato playing, the notes should sound as if they were connected, or "tied together".
Many people will say that legato just means doing a lot of hammer-ons and pull-offs, but that is a description of technique, not the sound. You can achieve a staccato (opposite of legato) sound by using hammers and pulls, and you may be able to muster a legato sound by picking many notes. For a prime example of this misconception, watch this video. Notice how his sound his very tight, snappy, and defined in between each note. That makes it staccato.
Now, let's discuss how we can achieve an actual legato sound. Well, here's what our goal is: to have no change in volume, tone, or percussive nature of consecutive notes. The most useful tool for accomplishing this is a proper hammer-on technique. Now, what makes a hammer-on technique proper is two things. First of all, as we hammer, we must not remove the finger holding the original note too early. It will cause a slight gap in between the notes, and that's not what we want. Secondly, the attack of our pick must be exactly the same as the attack of our hammering finger. If you can perfect these two things, you will notice your legato sound start to improve immediately.
While we're on the subject of hammer-ons, let's talk about ghost hammers. For those who don't know, a ghost hammer is when a note is hammered without an initial picked note on the same string. This is just a very useful way to ensure a smoothness of sound and note-linkage.
Another useful technique to get down is hybrid picking, or using fingers to pluck notes along with the pick. Because the flesh on a finger is softer than the material on a pick, a string plucked using a finger can sound less snappy or percussive. Now, country players use this technique as well, but they achieve a VERY snappy and percussive sound. This is because a) they might be using their nails as opposed to the flesh and b) they aggressively pull the string upward, and let it snap back down. When hybrid picking, make sure you only rub the string with your finger, don't snap it.
Now, you may have noticed that I did not talk about any sort of pull-off technique. This is because pull-offs can sound very staccato very easily. When we pull off, we bend the string a bit, and let go. This is exactly what we do when we pick a note. Over-using pull-offs will make something seem less legato due to the snappy, percussive nature of the technique. Now, I'm not saying abandon pulling-off altogether, just be careful when you do. If you find yourself needing to get to a lower note, but don't want to pull-off, see if there is a way to achieve that lower note by using a ghost hammer on the next-lowest string. Getting in the habit of doing this can really be helpful for playing legato passages and pieces.
If you want to listen to some legato guitar music, Allan Holdsworth is the first guy you should check out. If you would prefer to hear legato in a more classical sense, you can't go wrong with Frederic Chopin (1810-1849), a romantic-era pianist.
I hope this was helpful. I would have posted a video lesson, but I have no means of doing so. Feedback, criticism, comments, compliments, etc. are all appreciated.