It is both a dear person who you address to regularly, so you call it "güey" over and over, instead of using its name each time, like "dude" in english, or a person you consider not to be trustable, because it lacks of the cleverness, wisdom, or experience needed for a certain task, like an "asshole", in english. It is the right spelling in spanish for the mexican expression "wey", from which you will find similar definitions to the one I just wrote.
In case of endearment:
¡Qué onda, güey! - What's up, dude?
Sí, güey, está cabrón, güey, ya le dije, güey... - Yes, dude, it's all fucked up, dude, I've allready told her, dude...
In case of mistrust:
Nel, a ese güey no lo quiero en mi equipo - No way, I don't want that asshole in my team
The mood you get at when high, or simply by deciding not to worry about things you can't solve. The state of mind needed to go along well with your significant others.
Let's set our free floating soul systems so we don't get worried for all the shit we get to know on the news...