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

mkdir a
cd a
hg init
echo 123 > a
hg add a
hg commit -m "a" -u a -d "1000000 0"

cd ..
mkdir b
cd b
hg init
echo 321 > b
hg add b
hg commit -m "b" -u b -d "1000000 0"

hg pull ../a
hg pull -f ../a
hg heads