...with some sensational arrangements of piano pieces by Granados and others--the first one I ever had was an RCA LP that came out in '73. (In case anyone else reads this and is confused--I refer to John Williams, the Australian classical guitarist and student of Segovia--not the film music composer).
Back in the early 80s a good friend of mine and I tried our hand at some of these duets and had a lot of fun making a hash out of them. A lot of this Spanish and Central/South American incidental music for piano transfers very well to the guitar. These composers were classically trained and thus imbued with the tradition of western art music (Villa-Lobos prelude 3, which is the first of the pair in the video you presented, is captioned as a "homage to Bach"); but at the same time celebrated all of the popular dance forms and many folk tunes.
Here are Bream and Williams playing an arrangement (by the famous guitarist Miguel Llobet) of Spanish Dance 11 by Granados. For some reason I've always felt like this was music for a still summer night, about midnight.