I installed 1.4.2 on Mac OS via macports.

However, I cannot seem to make commands.archive() work for 'files' mode,
whereas the command 'hg archive' and archival.archive() both work fine.

It's just that these lines of code from commands.py (lines 171-179) seem
very puzzling:

    prefix = opts.get('prefix') # This could very well be None
    if dest == '-': # Not relevant for 'files' mode
        # ...deleted...
    # prefix can still be None (moreover, it *should* be none for 'files')
    # Now, make_filename() will do a len(None) in a moment
    prefix = cmdutil.make_filename(repo, prefix, node)
    # So we don't get here
    archival.archive(repo, dest, node, kind, not opts.get('no_decode'),
                     matchfn, prefix)

Apologies if this is my mistake.