I'm afraid I have to take slight issue with @Bradd's otherwise solid answer. Actually, it's not a direct disagreement but a clarification: Professional guitar players usually can read sheet music, and most can also interpret sheet music by extrapolating parts of it as you describe. In a context of a pit orchestra (as in a musical show), studio recordings, or other professional entertainment settings, guitar players are expected to do just this. The lack of reading skills among guitar players is more a product of the lack of availability of good music for them to read despite it being one of the most popular instruments. In addition, tab is easier to write and edit so it is much more prevalent.The caveat being that most tabs available on the Internet are written by amateurs and are incomplete and full of mistakes.
It's important to clarify that there is a difference between sheet music, tablature, lead sheets, and arrangements.
Arrangement means the total musical content for the song, for all musical players. Technically this could even mean every single note of every single part hand-written on a page somewhere, though this is rare except in classical music. Even in contemporary styles where the arranger takes much control (jazz, television scores, etc), the player is usually expected to infer some stuff based on the arrangement. For instance, the drummer's part may have one-measure of drum pattern written out, and then the drummer is expected to play something like that. He is even probably expected to play special fills at certain points in the music according to his or her own judgment.
Tablature is a means of writing specific instructions for what frets to play on the bass or guitar. However, it is sorely lacking in some ways, especially in the notation of rhythm. Some tablature includes rhythm. Finding tablature also means that the person providing the music understands how the guitar works and can notate it in tablature, which means if guitar players can't read sheet music, they can't participate as actively with players of other instruments who can.
Sheet music is what I think you are referring to. It is any music notation usually with a 5-line staff, at least one treble clef staff having the melody, and any other numbers of lines/clefs for other instruments. Nowadays, chords are often included above the music for everyone's reference.
Lead sheet is a condensed sheet music that doesn't have as much information. Usually it shows the chord form, any lyrics, and the basic melody.
I'll try to answer your questions about how to create an "on-the-spot" arrangement from sheet music or lead sheet:
The sheet music has only a treble clef and a bass clef
The guitarist would play the treble clef and the bassist would play the bass clef, though each would probably improvise a little bit.
The sheet music has a treble and chord symbols above the treble clef:
Guitarist 1 would play the notes, bass would play a bass line of his own devising following the chords. A second guitarist or a pianist would play the chords. Other instruments not featured could also "comp" on the chords. For instance, a violin player might play partial chords.
The sheet music has TWO treble clefs AND chord symbols above them:
Depends. If the guitarist can play two treble clefs at once, that might work. Most likely you need one instrumentalist for each treble clef, as well as someone to play the chords, someone to play a bass line from the chords, and percussion. That's what bands are for!
Playing full arrangements of tunes with just a guitar and bass can be a little bit of a challenge, and it might take some time to find tunes that are suitable for this situation.
