As a novice, it seems like the mark of a great guitarist to be able to do this and it's something I would love to be able to do... where do you begin?

Are there any books that teach this?

Basically, you really need to know your scales/modes, chords, arpegios and intervals back to front. You have to train yourself to the point that as soon as you see (for example) a Dominant 7th chord (eg. G7), you know straight away that it consists of Tonic, Major 3rd, Perfect 5th, and Minor 7th intervals.

But similarly, you need to understand the function of each chord within a progression, in other words, to see where it's coming from and where it's going. For example, let's say we're in C Major. If you make chords from the notes of the C Major scale, you would get:

C, E, G, B (Cmaj7)
D, F, A, C (Dmin7)
E, G, B, D (Emin7)
F, A, C, E (Fmaj7)
G, B, D, F (G7)
A, C, E, G (Amin7)
B, D, F, A (Bmin7b5 ... aka B half-diminished)

I like to call this the spectrum of a scale (though there's probably a better term out there somewhere).

So you might have a chord progression that goes something like: Cmaj7 | Amin7 | Dmin7 | Fmaj7 || etc.

As all of those chords belong in the spectrum of the C major scale, you could be fairly safe improvising over it simply using the C major scale (rather than jumping through hoops by trying to nail every chord on its own).

Let's say the chord progression then changed to: Cmaj7 | Amin7 | Dmin7 | F7 | Bbmaj7 ||. The composer has used the Dmin7 chord as the pivot chord to change keys to Bbmaj. This works because Dmin7 is common in both the spectrums of the C major and Bb major scales. So the moment you see that F7 chord, it should hopefully stick out as not being part of the C major spectrum, and is therefore probably going somewhere else... so you could start improvising using the Bbmaj scale from that point, even before it hits the Bbmaj chord.

Anyway, I hope that makes sense

My best advice.....just strat playing. Trial and error does wonders. U will get the feel of it after a while.