This piece of code, file test.py,
if 1:
print \"foo\"
print \"bar\"
can be successfully executed with execfile(\"test.py\
Indentation is probably lost or broken.
Have a look at IPython -- it's an enhanced Python interpreter with many convenient features. One of them is a magic function %paste that allows you to paste multiple lines of code.
It also has tab-completion, auto-indentation... and many more. Have a look at their site.
Using %paste in IPython:

And copy-and-paste stuff is one of the things fixed in the Qt console. Here's using a plain old copy-and-paste of your code block that "just works" in the new IPython qtconsole:
