If source equals destination path the contents of the 
file is deleted.

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I know the Unix 'cp' command tests for this condition, but
shouldn't this fall in the category of "don't do that, then"
in the Python world? How stupid do we expect the programmer
to be?

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To the OP, if you're paying attention: shutil is pretty
useless.  You might consider using distutils.file_util
instead (though I don't know if that suffers from this
"problem").

I wanted to do somthing about this before 2.2, sigh...

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That's correct when using the command interactively. 
But when the command is used in an environment where source 
and destination path come from user interactions over a GUI 
for instance the programmer won't check for the source and 
destination path each time the command is called. 
In my example I had a relative and an absolute path to 
compare. So I would have had the relative path tracked 
programmatically. At the end it seemed clearer to me to 
read the source file out, create an empty destination 
(open "w+") and write the dump to this file. 

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See patch 604600

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Fixed for Py2.3.
See shutil.py 1.23
Also, see patch 604600.