The first time I saw this scene, I basically saw it the way you are now. There used to be a local station that played cheapish movies late on Sunday nights and one time I tuned in late and saw this scene. I don't think I saw any context of the rest of the movie, I was just presented with this... and I was transfixed. It was so insane but I loved it.
Since then I've seen the movie and I can give it some explanation even though it will still make no sense. This is a scene in the movie "Crossroads" where Ralph Macchio has gone down to the crossroads to duel with one of Satan's minions for the ownership of someone's soul. See how that works?
It's the "WWF Wrestling" nature of it that's so delicious. Every note of the guitar is translated into full-body expression so the people in the back row can really see every nuance. And, yes, when one is vanquished via guitar solo, he doesn't just say "oh, I can't play that", no, he drops to the floor, collapses, in utter defeat.
A bit of trivia: in reality, Steve Vai is playing both parts.
