I spend hours and hours on my technique. I am now finding it very difficult to incorporate any fast picking licks or sweep stuff or
Legato passages into musical situations. I know the theory behind the notes and stuff, just cannot figure how to get the licks and
Stuff to work in improve. How can I work on this?

My humble opinion....follow the chord voicings....
Use the ...lead notes to bounce licks off of.

PB knows this topic...its probably one for a book or two...well...maybe a series of books if not an entire degree in.

this one is best for PB.

Thats one of the hardes things to do my friend...:)
improv

Maybe think of it like learning English...both are languages....both move emotions......both are learned with the joining of simple phrases forming more complex phrases.

Pebber made a few videos years back that I asked him to do. The topic was how to solo over a Dom7 chord. Still today, it's one of my absolute favorite PB videos. Find it on youtube. Lots of info. When Pebber shows phrases to play it will blow your mind. Find it!

Besides that, I agree with Frakh, PB is the best to answer this.

Here is the first of the dom 7th video. Also, can't say enough good things about just trying stuff out against the backing tracks Pebber has given to try out these ideas.

http://www.youtube.com/watch?v=sPLP66dlxLE&feature=plcp