For blocks and models (not controllers), the override is pretty simple. Unless you want to make a module portable to other projects, you can copy the model you want to override from core/ to local/..

So if you want, for example, override Mage_Directory_Model_Currency, you have to copy app/code/core/Mage/Directory/Model/Currency.php to app/code/local/Mage/Directory/Model/Currency.php, and make modifications to that local file or use the following XML configuration.

<?xml version="1.0"   ?>

<config>
  
    <Ayasoftware_currencymodule>
      1.0
     </Ayasoftware_currencymodule>
  
  
  <global>
    <models>
       <directory>  
              <rewrite>
                 <currency>Ayasoftware_currencymodule_Model_Currency </currency>
              </rewrite>  
      </directory>                    
     </models>
    </global>
    
    <admin>
		<routers>
			<ayasoftware_currencymodule>
				admin
				<args>
					Ayasoftware_currencymodule
					directory
				</args>
			</ayasoftware_currencymodule>
		</routers>
	</admin>
</config>