With Mercurial 1.4.x "hg diff <file>" is very slow.  Here is an example
right in Mercurial's own source tree:

  $ ./hg --time diff -r9000:10000 mercurial/dirstate.py > /dev/null
  Time: real 12.680 secs (user 11.810+0.000 sys 0.230+0.000)

Compare with 1.3.1:

  $ /usr/local/hg-1.3/./hg --time diff -r9000:10000 mercurial/dirstate.py >
/dev/null
  Time: real 0.330 secs (user 0.270+0.000 sys 0.050+0.000)

Bisection fingers this changeset for the slowdown:

changeset:   9750:f153af9580fe
user:        Matt Mackall <mpm@selenic.com>
date:        Sat Nov 07 14:07:45 2009 -0600
summary:     merge: first part of fix for issue1327