I think mpm has applied a fix for this in his private branch. It was a very old
bug, now revealed by changes in the sample mergetool configuration. It will
probably not be released before the marts release.

Neal, I suggest that you just release a new package with the offending
filemerge.executable line disabled. The current Fedora package
mercurial-1.1.2-2.fc10.i386 without any mergetool configuration gives a
inconvenient user experience.