MattiasOfTheMetal:
So my question is, is that will I need to bias the guitar's AC signal into a positive AC signal instead of a +/- 0-1v or should that not matter? It will be sharing a 9V DC line, so it will still have power, I just don't want the guitar's AC signal to mess up my arduino.
When overlaying an AC on an existing DC signal, the resulting voltage level will be the sum of the two signals at any given instant of time. For example, if you have a ± 1 VAC on a 9 VDC line, the crest will be +10 V and the trough will be +8 V. Another way of thinking about it is to start with your AC at ground and shift it based on the magnitude and sign of the DC voltage. Personally, I don't like laying data signals over power when running a separate wire is feasible, but an AC signal with an amplitude of 1 V shouldn't be a problem (± 4 V would be because you are going beyond both the minimum and maximum recommended voltage ranges for the voltage regulator).
Also, if you can wait a few weeks, the new Arduino Due will be out the 22nd of this month. Not only is it based on a 32 bit, 84 MHz, microcontroller; it will also have 2 real DAC outputs (I think 12 bit resolution, like the ADC). That might make this project easier.