If you read Bottleneck Slide. Part 1, you now know how to use a slide properly, but a single proper note makes for a pretty bland song. There are several more techniques specific to playing slide that will help to make your slide work sound like music and less like a broken spring.
Ok, you've got your guitar in open E tuning (if not, do it now for the sake of learning), you've got your slide on your favorite finger, and your pick in hand. Strum the open strings, mmm... what a nice E major chord. Now lay the fret down on the strings directly over the 5th fret, so that it touches all the strings but the strings do not touch the frets or fretboard. Now strum again. What an ugly A chord. Try again, but this time wiggle the slide back and forth (up and down the fret board) ever so slightly, and quickly, being careful to keep the slide parallel to the frets.
Move the slide between being directly over the fret to about half way to the next fret, towards the nut. If your slide goes sharp it won't sound correct. Much better right? The wiggle makes the note waver around A, and our amazing ears are then able to pick out that millisecond when your slide is in the perfect spot, and disregard the rest of what it hears as shimmer. So remember that; Technique 1. Wiggle (vibrato is what it's really called).
Now place the slide over the 12th fret, this should be an E chord. Strum it and listen carefully. Do you hear what sounds almost like 2 sets of strings vibrating? If so, that's because there are 2 sets of strings ringing, sort of. The strings are vibrating on both sides of the slide. Take that index finger that was getting bored and gently lay it down over the strings behind (toward the nut) the slide, just enough to mute the vibration. Strum it again. Much better. This technique, left hand muting, is a little harder to get used to than the vibrato but after a little practice it will be natural.
When playing on only 1 or 2 of the strings, be sure to use your picking hand to mute the other strings. The sound of unwanted notes ringing with the good ones can ruin otherwise perfect playing.
The first and most obvious is the slide. Yes, it sounds dumb to explain it but there is a proper way to go about sliding, from each of the 2 possible starting points. If the slide is already on the strings, the slide is simple. Just gracefully move your slide from the note your on to the note you want (keep in mind this is all relative to one string). When you arrive at the intended note, immediately throw in the vibrato you've been practicing.
If the slide is not in contact with the strings when you want to begin a slide, its only slightly more tricky. At the last possible moment before your slide hits the strings, lay down your fret hand index finger to mute the strings and cut down on that annoying springy-buzz noise. It's usually best to hit the strings with the slide already in motion towards your intended note. Once that is accomplished, see the above paragraph. To execute a pull-off rotate the slide laterally (towards the floor) off the fret board. This will allow the string to keep ringing while minimizing buzz.
The next idea is much like the first one. Because your strings are not smooth, moving the slide generates a small amount of vibration. Move the slide more than a few frets, and it gets rather loud, so the technique that comes out of this is to start with the slide on whatever fret you like and slide up or down to your intended note, then and only then striking the note. This is a very different effect from sliding a note normally. Also, this generally works best when sliding from a low fret to a higher fret, because as the length of string vibrating gets shorter, it vibrates more (louder) much like how waves get taller towards the shore.
Now imagine your in Open E tuning again. And your chord progression calls for an F# chord. In the major chord scale, this chord should be minor, but unfortunately youre in Open E major. All you need to do to fix this is to use your middle finger (or index, its up to you). Lay the slide down on the 2nd fret, (remember, vibrato!) and use your middle finger to fret the third string on the first fret, thus making the major chord, minor. If you feel the need to play solely with your fingers during a section of a song pull your slide finger away from the strings only far enough to keep the slide from touching the strings. If you try too hard to move the slide away it becomes difficult to use your other fingers to fret notes because your hand tenses up.
When you get basic slides figured out and fingering notes with your extra fingers, you can take notes from people like Duane Allman. Allman plays a part of Jessica by The Allman Brothers Band on a part of his guitar that is beyond frets. This ability comes from practicing his slide playing by ear. So it is important to keep in mind that you're not limited by things like frets when playing slide. Also, the slide doesn't have to limit you either. Although slides are straight, you can slide one note while keeping another constant. One easy way to go about this is to fret one note with your finger, and slide another with your slide. A more advanced approach would be to turn your hand so that the slide touches, for example, the 3rd string 11th fret and the 4th string 12th fret and then twist the slide so that both strings are played at the seventh fret. (this would really scream, then nicely resolve to power chord in standard tuning).
To help get used to using a slide, most of the common fingering drills can be used. For example, ascending and descending chromatic runs and scale runs. Alter these drills by sliding every other interval, and by working backwards. Slide from the root note to each note in the scale. All these will help develop both your ear and the accuracy with which you use a slide. Practicing switching between strings will also help to ingrain in you the pitch change between each string in whatever tuning you use. And as with any guitar technique, work for accuracy, not speed.
That should get you well on your way to playing slide, both lead and chords. While you're trying to get the hang of it, it is very helpful to improvise over a few chord progressions, and close your eyes to help you avoid watching the frets. Your ears are better at knowing when you've hit the note than your eyes are. The slide guitar is has a big history in blues, so it really helps to feel what you're playing.
When you need inspiration for your playing, (or want to feel inferior) check out slide wizards like Duane Allman (Old Friend a song I beleive to be a definitive representation of what slide can do, Jessica, and Whipping Post), Robert Johnson (who frets a large amount of notes with his fingers), and Muddy Waters. For more original inspiration, listen to music that includes pedal steel guitars, or lap style slide guitars, although these sound much different many of the musical ideas can be translated to the bottleneck slide. So good luck and enjoy!