Recent developments in molecular theories and simulation of ions and polar molecules in water are reviewed. The hydration of imidazole and imidazolium is used to exemplify the theoretical issues. The treatment of long-ranged electrostatic interactions in simulations is discussed extensively. It is argued that the Ewald approach is an easy way to get correct hydration free energies corresponding to thermodynamic limit from molecular calculations. Molecular simulations with Ewald interactions and periodic boundary conditions can also be more efficient than many common alternatives. The Ewald treatment permits a conclusive extrapolation to infinite system size. Accurate results for well-defined models have permitted careful testing of simple theories of electrostatic hydration free energies, such as dielectric continuum models. The picture that emerges from such testing is that the most prominent failings of the simplest theories are associated with solvent proton conformations that lead to non-Gaussian fluctuations of electrostatic potentials. Thus, the most favorable cases for second-order perturbation theories are monoatomic positive ions. For polar and anionic solutes, continuum or Gaussian theories are less accurate. The appreciation of the specific deficiencies of those simple models have led to new concepts, multistate Gaussian and quasi-chemical theories, which address the cases for which the simpler theories fail. It is argued that, relative to direct dielectric continuum treatments, the quasi-chemical theories provide a better theoretical organization for the computational study of the electronic structure of solution species.