This extension is not distributed with Mercurial.
Download site: http://code.google.com/p/win32chcp/
The purpose of the extension is to help international Windows users obtaining readable Mercurial output on their consoles.
The extension switches the encoding of your console just before you see any output. The encoding matches the encoding actually used by the Mercurial on output, so in most cases you will get readable characters on your display.
See also: CharacterEncodingOnWindows.