There are two ways to copy a database wholesale: backup/restore and detach/attach - neither of which is a one-step process, and backup/restore would definitely be preferred given the scenario you describe.
If the "failover" database needs to be kept online while it is being updated, you're pretty much stuck with replication. However, since the databases are on the same instance, you can just use cross-database queries to move data.
I hate to go outside the bounds of the question, but a "failover" database on the same instance as production does not provide much in the way of fault tolerance. What kind of failures are you hoping to protect against?
Edit: What you might be looking for, then (if you're on enterprise edition 2005+), is database snapshots as JMusgrove suggests. You can take a snapshot at any point in time, then revert the database to that snapshot if it becomes necessary. The snapshot is only read-only until and unless you revert to it. See this MSDN article on Reverting to a Database Snapshot. I would suggest that it's between snapshots and backup/restore.