On win98 os.path.expanuser('~') does not result in a useable directory. The MSDN recommendation for user specific directories is the use of shell.ShGetSpecialFolder, so use it. For details see: http://msdn.microsoft.com/library/default.asp?url=/library/en-us/shellcc/platform/shell/reference/functions/shgetspecialfolderpath.asp

#!/bin/sh

hg init rep
cd rep
mkdir dir
touch foo dir/bar
hg -v addremove
hg -v commit -m "add 1" -d "1000000 0"
cd dir/
touch ../foo_2 bar_2
hg -v addremove
hg -v commit -m "add 2" -d "1000000 0"