Don't expand empty [paths] so later interpolation can do the right thing.
Example:
[paths]
default =
default-push = %(default)s
#!/bin/sh
mkdir test
cd test
echo foo>foo
hg init
hg addremove
hg commit -m 1
hg verify
hg serve -p 20059 -d --pid-file=hg.pid
cd ..
hg clone http://localhost:20059/ copy
cd copy
hg verify
hg co
cat foo
hg manifest
hg pull
kill `cat ../test/hg.pid`