Use smerge minor mode in emacs to resolve conflicts.
The condition-case is used to suppress errors with emacs versions before 21.
#!/bin/sh
# http://www.selenic.com/mercurial/bts/issue322
echo % file replaced with directory
hg init a
cd a
echo a > a
hg commit -Ama
rm a
mkdir a
echo a > a/a
echo % should fail - would corrupt dirstate
hg add a/a
cd ..
echo % directory replaced with file
hg init c
cd c
mkdir a
echo a > a/a
hg commit -Ama
rm -r a
echo a > a
echo % should fail - would corrupt dirstate
hg add a
cd ..
echo % directory replaced with file
hg init d
cd d
mkdir b
mkdir b/c
echo a > b/c/d
hg commit -Ama
rm -r b
echo a > b
echo % should fail - would corrupt dirstate
hg add b
exit 0