Python - what is the correct way to copy an object's attributes over to another?

The code you give is correct and safe, avoiding "accidentally" binding attributes that should not be bound. If you favor automation over safety and correctness, though, you could use something like...:

def blindcopy(objfrom, objto):
    for n, v in inspect.getmembers(objfrom):
        setattr(objto, n, v);

However, I would not recommend it (for the reasons implied by the first para;-). OTOH, if you know the names of the attributes you want to copy, the following is just fine:

def copysome(objfrom, objto, names):
    for n in names:
        if hasattr(objfrom, n):
            v = getattr(objfrom, n)
            setattr(objto, n, v);

If you do this kind of thing often, having this code once in a "utilities" module can be a definite win for you!

If they're that similar, and need to change state, it sounds like you really have instances of one class, and a mode or similar attribute that determines how it behaves. Objects shouldn't morph from one object to another, similar but separate object, very often at all.