This is now included in version 1.1 and later. There's an example.
An experimental hgweb feature to visualize branches. There is no way to turn it on as it is not integrated into the mainline (yet).
http://selenic.com/pipermail/mercurial/2007-November/015782.html - contains link to example repo
http://selenic.com/pipermail/mercurial/2007-November/015805.html - Matt's opinion