There are two rings involved in your question:
1) The ring you described, which should actually be denoted $\mathcal C^\infty_{M,x}$
2) The ring $\mathcal C^\infty(M)_{\frak m}$, described as follows. Call $\frak m$ the ideal in $\mathcal C^\infty(M)$ consisting of global functions zero at $x$, that is ${\frak m}=\lbrace f\in \mathcal C^\infty(M): f(x)=0\rbrace$. This is a maximal ideal in $\mathcal C^\infty(M)$, and you can localize $\mathcal C^\infty(M)$ at this ideal to get $\mathcal C^\infty(M)_{\frak m}$. The elements of this localized ring are formal fractions
$f/g$ with $f,g\in C^\infty(M)$
and $g(x)\neq 0$ . Beware that these formal fractions are by no stretch of the imagination interpretable as functions on $M$
, since $g$ might very well vanish outside, say, the interval $(x-1,x+1)$ !
There is a canonical ring morphism $\mathcal C^\infty(M)_{\frak m} \to \mathcal C^\infty_{M,x}$ and the strange, perhaps underappreciated, result is that it is an isomorphism.
To answer your question:
1) In the first incarnation an invertible element is a germ $[(U,h)]$ with $h(x)\neq o$ and its inverse is $[(U',1/h)]$, where $U'\subset U$ is a neighbourhood of $x$ on which $h$ has no zero.
2) In the second incarnation an invertible element of $\mathcal C^\infty(M)_{\frak m}$ is a fraction of the form $f/g$ with $f(x)\neq 0$ (in addition to $g(x)\neq 0$, of course), and its inverse is $g/f$.