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The 'altered' 7th is a dominant 7th chord with an 'altered' (i.e. flattened or sharpened) 5 and 9: 1-3-b5(or #5)-b7-b9(or #9)
It is used as an alternative to a normal 7 chord, especially when the chord is due to resolve to a minor chord afterwards.
Standard scale choice
The 'altered' scale is also called 'super locrian' by rock types, while jazz players like to call it the 'diminished-whole-tone' because the first half is from a diminished scale, and the second half from a whole-tone scale: 1 b2 #2 3 b5 #5 b7
There are lots of cool-sounding arpeggios contained in this scale which can make some hip sounds. For example, you could try alternating the major triad built on the root with the major triad built on the b5.
Another common trick is to play m(Maj7) arpeggios built on the note a semitone above the root. Art Pepper liked to do this.
If pentatonics are your thing, you could also try playing the "altered pentatonic" over this. That's the minor pentatonic based a semitone about the root of the chord, but with the fifth note of the the pentatonic raised by a semitone to function as the chord's root.