I've owned Guitar Hero and Guitar Hero 2 since last November. At first when I got the game, I was at a "medium" level. I've been practicing at the "hard" level recently. I realized that I have broken through to a new plateau. I realized this when I noticed that I had played nearly every song in hard mode in both games.
I have figured out the elements of this skill. There seems to be two extra abilities. The first is being able to move my fingers really fast. When those notes are zipping down so quickly you really need to be able to reposition fast. Secondly the ability to handle all 5 fret buttons with 4 fingers without looking.
For example if you're doing a reverse crescendo, you hit the orange fret with the pinky, then blue fret with the ring, yellow fret with the middle, and the red fret with the last index finger. Now you're out of fingers, so slide the index finger to the green fret and you're done. This siding action is the essential ingredient to handling 5 fret buttons with 4 fingers.
I'm not exactly sure how I developed these skills, other than only playing hard songs. I guess practice really does make perfect (almost, soon).
I wouldn't say that playing Guitar Hero is similar to playing the actual guitar - I don't play the actual guitar, but I had some experiences recently that leads me to believe there is some transferable skills. Here in Seattle we have the Experience Music Project, which has a cool permanent exhibit called the Sound Lab. The lab has a bunch of instruments in a computer guided tutorial setup. A few years ago I did the guitar tutorial, I remember it being cool but I didn't get much out of it then. I recently went back and tried it again, and the intro tutorial seemed distinctly easier than last time.
I figure this is because I had practice at maintaining a rhythm with my right hand and moving my left hand quickly. While I don't actually know chords or any guitar specific real skills, I definitely think the base skill helps somewhat. Of course without actually learning the guitar, I guess I'll never know.