--- subrepo.py.old	2010-02-06 00:07:55.000000000 +0100
+++ subrepo.py	2010-02-06 14:28:36.000000000 +0100
@@ -161,7 +161,8 @@
             util.makedirs(root)
             self._repo = hg.repository(r.ui, root, create=True)
             f = file(os.path.join(root, '.hg', 'hgrc'), 'w')
-            f.write('[paths]\ndefault = %s\n' % state[0])
+            f.write('[paths]\ndefault = %s\n' % os.path.join(
+                _abssource(ctx._repo),path))
             f.close()
         self._repo._subparent = r
         self._repo._subsource = state[0]