Here's a quote from an article I found on the topic:
"...the movement needed to play may come from the arm(reccommended for beginners) or from the wrist (this one is more difficult, and only after very much practice you can get a good sound), like Carlos Santana's vibrato. "

So I guess my vibrato is still at beginner status despite 30 years of playing :-).

Here's a link to the entire article. Don't bother reading the vulgar and immature comments at the bottom:
http://www.ultimate-guitar.com/lessons/guitar_techniques/vibrato_techniques_for_beginners.html