Use smerge minor mode in emacs to resolve conflicts.
The condition-case is used to suppress errors with emacs versions before 21.
#!/bin/sh
hg init
echo % should fail
hg add .hg/00changelog.i
mkdir a
echo a > a/a
hg ci -Ama
ln -s a b
echo b > a/b
echo % should fail
hg add b/b
echo % should succeed
hg add b
echo % should still fail - maybe
hg add b/b
exit 0