Spencer, I'm not 100% sure I agree with you there - I want to confirm this with a guitar in my hands (as I haven't had much of a chance to really get into theory for the lasy year or two). But, without further ado...
I'm pretty sure it's NOT a question of replacing the root with a b5 (as an aside, while they're enharmonic equivalents, the b5 of C is Gb). My memory is pretty shady from this point on, as I haven't played any real jazz since college (say, two years), but I think rather than just replacing the root, you replace then entire dom7 with a dom7 built off the b5.
Take a G7 chord - G-B-D-F. Now, build a dom7 off the b5, Db. This gives you Db, F, Ab, and Cb. Relative to G, that's your b5, 7, b9, and 3 (technically a diminished 4th, but once again, relative to G). Essentially, that's a G7b5b9. It might not be something you'd NECESSARILY want to play over a G, for an "inside" sounding harmony, but you could to add quite a lot of tension to a set of changes, or you could swap out a G7 for a Db7 in a chord progression and have it sound tense but workable.
I think we're talking about the same thing, as we end up on basically the same chord, but if you look at the notes in question in your example (Gb,E G, Bb), you'll notice that there isn't actually a b9 in there, so from a conceptual standpoint, you really DO need to replace the entire chord.
If you want to see why this works... The fundamental principle actually comes from another, even simpler, substitution. If you take a dom7 chord, and then compare it to a diminished 7th chord played one half step higher, you'll notice that they're exactly parallel, barring the root. So, if you swap out a dom7 for a dim7 a half step up, you get a chord that implies a 7b9. Now, because a dim7 chord is constructed of stacked minor thirds, this shape repeats every three frets up the neck. Shift it up once, and it's inverted over the b3 (M3 relative to our original dom7). Again, and it's over the b5 (5 relative to the original dom7). But, remember, by dropping just the root down a half step, you get a standard dominant 7th. If you do that, you have a standard dominant 7th chord that's implying a 7b5b9 within the harmonic context of that original 7th chord.
As an aside, that diminished 7th chord (and it's related inversions) make much more consonant sounding direct substitutions - no one will ever consider a b9 a "inside" substitution for a dominant, but it's a MUCH easier one to make work musically, and thus is a little more practical (while still giving you that walking bassline spencer was talking about)
I hope this helps... Despite my initial disclaimer, once I got warmed up a bit, this came back to me pretty clearly. I just hope I didn't get too long-winded and confusing.