It depends on how exactly you want to change the state..
If you want to retain the standard states and its functionality but you just want to change those strings of those states, you can just inherit & override the state column by changing the string of those states as per your requirements..
But if you want to change the state name and as well as functionality, then no other go definetly you need to change/overriden the Workflow... [as each state represents the progress/ status of the transactions]...
Hope this might help you...
Thanks. I have seen it. When i modify the .py code, do i need to recompile the file to .pyc? I noticed some modules have both .pyc and py for the same file... e.g purchase_requisition.pyc and purchase_requisition.py under the module purchase_requisition. Which file gets excecuted here?