Edit in JSFiddle

var Item = function(data) {
    this.name = ko.observable();
    this.price = ko.observable();
    
    //populate our model with the initial data
    this.update(data);
};

//can pass fresh data to this function at anytime to apply updates or revert to a prior version
Item.prototype.update = function(data) { 
    this.name(data.name || "new item");
    this.price(data.price || 0);
};

var ViewModel = function(items) {
    //turn the raw items into Item objects
    this.items = ko.observableArray(ko.utils.arrayMap(items, function(data) {
        return new Item(data);
    }));
    
    //hold the currently selected item
    this.selectedItem = ko.observable();
    
    //make edits to a copy
    this.itemForEditing = ko.observable();
    
    this.selectItem = this.selectItem.bind(this);
    this.acceptItem = this.acceptItem.bind(this);
    this.revertItem = this.revertItem.bind(this);
};

ko.utils.extend(ViewModel.prototype, {
    //select an item and make a copy of it for editing
    selectItem: function(item) {
        this.selectedItem(item);
        this.itemForEditing(new Item(ko.toJS(item)));
    },
    
    acceptItem: function(item) {
        var selected = this.selectedItem(),
            edited = ko.toJS(this.itemForEditing()); //clean copy of edited
        
        //apply updates from the edited item to the selected item
        selected.update(edited);
        
        //clear selected item
        this.selectedItem(null);
        this.itemForEditing(null);
    },
    
    //just throw away the edited item and clear the selected observables
    revertItem: function() {
        this.selectedItem(null);
        this.itemForEditing(null);
    }
});

ko.applyBindings(new ViewModel([
    { name: "Cheese", price: 2.50 },
    { name: "Pepperoni", price: 3.25 },
    { name: "Deluxe", price: 4.25 }
]));

<ul data-bind="foreach: items">
	<li>
        <a href="#" data-bind="click: $parent.selectItem, text: name"></a>
        (<span data-bind="text: price"></span>)
    </li>
</ul>

<hr/>

<div data-bind="with: itemForEditing">
    <form class="form-horizontal">
      <div class="control-group">
        <label class="control-label" for="itemName">Name</label>
        <div class="controls">
            <input type="text" id="itemName" data-bind="value: name" />
        </div>
      </div>
      <div class="control-group">
        <label class="control-label" for="itemPrice">Price</label>
        <div class="controls">
            <input type="number" step=".01" id="itemPrice" data-bind="value: price" />
        </div>
      </div>
      <div class="control-group">
        <div class="controls">
          <button class="btn" data-bind="click: $parent.acceptItem">Accept</button>
          <button class="btn" data-bind="click: $parent.revertItem">Cancel</button>
        </div>
      </div>
    </form>
</div>