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
touch unknown

touch a
hg add a
hg ci -m "1" -d "1000000 0"

touch b
hg add b
hg ci -m "2" -d "1000000 0"

echo %% Should show unknown
hg status
hg revert -r 0
echo %% Should show unknown and b removed
hg status
echo %% Should show a and unknown
ls