What is an ARC?
An ARC is an advanced reading copy. They are usually printed before the regular print run is done, either using a short run printer or a POD service. They often have a plain cover with just the title and author info. They are usually perfect bound, although I have seen some with spiral bindings. ARCs are sent out to key reviewers in advance of the release date to get the marketing buzz started. They may also be sent to bigger buyers to review before they place an order. There were no ARCs for HP #7.
What is a galley?
A galley is the press proof. There are pre-press galleys which are printed after typesetting but before they go to press. Authors are usually given these as their final proof copy—last chance to make corrections (meaning small typographical changes, NOT rewrites). But the usual use of the word is for the final proof from the printer. Publishers review this to make sure the printer has all the pages in the right order and all the fonts are printing correctly, etc.