Dude, you really need to stop posting guitar questions here... I mean, don't get me wrong, I love talking guitar... but this just isn't the place. Come by the mxtabs guitar forum, people will answer your questions there in a jiffy... lotta talented people posting there, lil bit too much focus on shredding and metal but they certainly don't mind talking other music when it's brought up... Anyway, you're lucky Sublime is my favorite band, and I'll answer this here... but find a guitar forum to post this shit on from now on =P
Anyway, yes, he's muting the strings rhythmically, and the "high notes" you describe I'm guessing are just pieces of the full chord being played, obv the higher notes... also rhythmically. None of it is random, just figure out when he's doing it and play around.
I.E.
-3-
-3-
-0-
-0-
-2-
-3-
Will get a diffrent sound if you just play the bottom 3 strings, g, b, and the high e.
I'm not 100% sure on this because I don't feel like taking my guitar out, but just fool around a little and you'll get it, nothing too difficult here.