Reading sheet music for the guitar is not really a necessity for the modern guitarist. The reason being is that most modern top 40 sheet music is usually simplified and not all that accurate. Music that is written accurately will supply you with tablature anyway. However it is still a good idea to be able to read sheet music in the event you are ever confronted with a song without tablature.
When music is written down on paper there are two main factors you have to consider. The first is pitch (how high or low the note sounds) and the second is rhythm (at what time the note is played and how long does it last for).
Before the days of records, tapes and CDs, the only way for a composer to keep a record of his songs was to write it down on paper. It is still the best and quickest way to score and play back what a composer has created. But it is an art form that takes years to perfect.