Objects are Python's abstraction for data. All data in a Python program is represented by objects or by relations between objects. (In a sense, and in conformance to Von Neumann's model of a ``stored program computer'', code is also represented by objects.)
Every object has an identity, a type and a value. An object's identity never changes once it has been created; you may think of it as the object's address in memory. An object's type is also unchangeable. It determines the operations that an object supports (e.g. ``does it have a length?'') and also defines the possible values for objects of that type. The value of some objects can change. Objects whose value can change are said to be mutable; objects whose value is unchangeable once they are created are called immutable. The type determines an object's (im)mutability.
Objects are never explicitly destroyed; however, when they become unreachable they may be garbage-collected. An implementation is allowed to delay garbage collection or omit it altogether --- it is a matter of implementation quality how garbage collection is implemented, as long as no objects are collected that are still reachable. (Implementation note: the current implementation uses a reference-counting scheme which collects most objects as soon as they become unreachable, but never collects garbage containing circular references.)
Note that the use of the implementation's tracing or debugging facilities may keep objects alive that would normally be collectable.
Some objects contain references to ``external'' resources such as open
files or windows. It is understood that these resources are freed
when the object is garbage-collected, but since garbage collection is
not guaranteed to happen, such objects also provide an explicit way to
release the external resource, usually a close method.
Programs are strongly recommended to always explicitly close such
objects.
Some objects contain references to other objects; these are called containers. Examples of containers are tuples, lists and dictionaries. The references are part of a container's value. In most cases, when we talk about the value of a container, we imply the values, not the identities of the contained objects; however, when we talk about the (im)mutability of a container, only the identities of the immediately contained objects are implied. (So, if an immutable container contains a reference to a mutable object, its value changes if that mutable object is changed.)
Types affect almost all aspects of objects' lives. Even the meaning of object identity is affected in some sense: for immutable types, operations that compute new values may actually return a reference to any existing object with the same type and value, while for mutable objects this is not allowed. E.g. after
a = 1; b = 1; c = []; d = []
a and b may or may not refer to the same object with the
value one, depending on the implementation, but c and d
are guaranteed to refer to two different, unique, newly created empty
lists.