Galactic Black HOle Binary Systems

I review observations of the X-ray spectra of Galactic Black Hole Candidates, and theoretical ideas as to how these can be produced. X-ray reflection should enable different source geometries to be distinguished, but the ionisation instability of X-ray irradiated material in hydrostatic equilibrium gives rise to large ambiguities in interpretation. It is not currently possible to determine whether the underlying emission mechanism in the low state is an advective flow or magnetic reconnection above the disk, but more detailed modelling of the ionisation instability {\it may} allow us to distinguish between these scenarios.