Call a template file in hook_block_view So I'm using the $block['content'] = right now to display the html for my module. But I can't bake any php into it with it laying inline like that.

How can I make a call to my custom template file that I've added to my module directory?
in your module use hook_theme() in drupal 7

function YOURMODULE_theme() {
  return array(
    'YOURMODULE_CUSTOM_THEME_NAME' =&gt; array(
      'variables' =&gt; array('title' =&gt; NULL, 'path' =&gt; NULL), // eg: if you want $title, $path in ur tpl. you can use any variable or an entire array/object.
      'template' =&gt; 'CUSTOM-TPL',
    ),
  );


and in your module folder ,create CUSTOM-TPL.tpl.php

now you can call it in 

$block['content'] = theme('YOURMODULE_CUSTOM_THEME_NAME', array('title' =&gt; $title, 'path' =&gt; $path));


for drupal 6 , user 'arguments' instead of 'variables' and 

theme('YOURMODULE_CUSTOM_THEME_NAME', $title, $path);