Before we dive into the realm of developing speed, let's dispel a few misconceptions about it. Firstly, speed in and of itself is irrelevant. However, speed used within the context of a good piece of music and with taste is a good thing. The second misconception of speed is covered in the article The Art of Practice. Most people believe that in order to play fast you must practice fast. While you will eventually need to practice fast in order to play fast you need to develop some basic techniques in order to get the tools in order to start working up to your goal. It's these techniques that need to be developed SLOWLY.
You need to be able to think while you play. Aaron Shearer, a famous classical guitar pedagogue was an advocate of “aim directed movement”, which is having a clear understanding of where the fingers need to go before you move them there. Aim directed movement can only be accomplished by slow practice.
The key to fast scales? The key is not only to practice flexing the finger (what the finger actually does to pluck the string) but practice extending the finger as well. From the time we were born our hands have grabbed things, and we have held on to them tight, thus, developing the flexors. It is our lack of strength in the extensors that need the catching up. One of the best ways to develop this is to practice Rasgueados ( Raas-Gee-ah-doe).
In his book Pumping Nylon Scott Tennant makes a good observation about speed. He notes that when we look at an entire work you notice that the fast parts only last for a measure or two. What answers can one draw from this observation? Some of the answers I have drawn are that while it is helpful to know your scales and play them quickly, it is not necessary to play them at break neck speed for lengthy periods of time. One of the things that can help us develop stamina to hold out during those passages is the daily practice of speed bursts.
A speed burst is taking a small portion of a scale and playing it ascending then descending with the eighth note as the rhythmic value for each note. Without stopping play the same portion of the scale ascending and descending, this time using the sixteenth note as the rhythmic value for each note. These are very helpful in isolating certain trouble spots in a scale, such as shifts and string crossings.
There are a lot of articles on Guitar Noise that will help you develop speed. But it will not come easy. A lot of hard work is involved. Start by studying the articles below, many of them are aimed at the classical guitarist and focus on the required technique.