Modify init command to take an optional directory to set up.
If the directory does not exist, it is created.
If no directory is given, the current directory is used.
#!/bin/sh
hg init
echo "nothing" > a
hg add a
hg commit -m ancestor -d "0 0"
echo "something" > a
hg commit -m branch1 -d "0 0"
hg co 0
echo "something else" > a
hg commit -m branch2 -d "0 0"
HGMERGE=merge; export HGMERGE
hg up -m 1
hg id
grep -Ev ">>>|<<<" a
hg status