I did this video for another forum on the Bluegrass Song Little Maggie. Basically we were talking about soloing over the tune Little Maggie. This is just a stream of concious of improvising. Initially the first couple were really simple and then after that it goes off somewhere.

Generally if you are improvising on a singing tune (At least in the Bluegrass tradition), the first half of the solo should have a lot of the melody in it. The second half, most people feel free to go off and be crazy.

Another scenario is if you are in a big jam and the first few people have already "paid homage" to the melody, then I feel like you have license to leave the melody behind and improvise more.

And the opposite can also make you friends, if nobody has played the melody, sometimes I'll just play a real simple melody with some nice doublestops and just a few fills on the long notes ... if you start doing this, you might find more people coming up to afterwards and commenting on your playing than if you just regurgitate a bunch of fancy licks. 

Happy improvising.

Mark