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

abort: Failed to parse .../t/.hg/hgrc
File contains no section headers.
file: .../t/.hg/hgrc, line: 1
'invalid\n'