I use a settings_local.py and a settings_production.py. After trying several options I've found that it's easy to waste time with complex solutions when simply having two settings files feels easy and fast.
When you use mod_python/mod_wsgi for your Django project you need to point it to your settings file. If you point it to app/settings_local.py on your local server and app/settings_production.py on your production server then life becomes easy. Just edit the appropriate settings file and restart the server (Django development server will restart automatically).