Sam Hart

Link to the release notes. Reprinted here...

Go get it!

General:
 * greatly improved merge tool configuration, see "hgrc.5.txt" for details
 * improved copy/rename handling in diffs, status, and merge
 * files in .hg inherit permissions from .hg/store
 * infer --repository when possible, so commands may be run from anywhere.
 * easy-installable
 * new "droplet" logo

Commands:
 * archive: disable ".hg_archival.txt" file addition with "ui.archivemeta"
 * bisect: now built-in with greatly improved performance and usability
 * bundle: new --all option to bundle the whole repository more easily.
 * cat: apply decode filters with --decode
 * clone: can clone from a full-history bundle
 * commit: warn when creating a new head
 * debugancestor: index argument is now optional
 * diff: set the number of context line to show with -U/--unified
 * grep: display matched revisions commit date with --date
 * import: new --no-commit and --user options
 * incoming/outgoing: add --limit option
 * log: use -b/--only-branch to show revisions of a single branch
 * remove: improve handling for --after
 * revert: major speedup
 * serve: prefix the served path with --prefix (also in [web] section)
 * status: unknown files are skipped by --quiet
 * tag: allow multiple tags to be added or removed
 * tags: --verbose flags local tags
 * update: switch between named branches without -C

Extensions:
 * churn: promoted to an official extension (previously in contrib)
 * color: new extension coloring "status" and "qseries" command outputs
 * convert:
   * allow synthetic history to be spliced in with --splicemap
   * support GNU Arch and Monotone sources
   * svn: allow shallow conversions of single branches with convert.svn.startrev option.
   * svn: make trunk/branches/tags layout detection more flexible by allowing either of them to be skipped.
   * svn: preliminary support as a conversion target
 * hgk: configuration file changed from .gitk to .hgk
 * highlight: new extension enabling syntax highlighting in hgweb file view (requires pygments)
 * inotify: new extension using Linux 2.6 inotify API for instant status checking
 * keyword: new extension for filewise RCS-keyword expansion in working directory
 * mq: new --currentdate, --date, --currentuser, and --user options
 * record: add "qrecord" command when used with mq
 * win32mbcs: new extension dealing with problematic MBCS behavior on Windows 

Web interface:
 * improved WSGI integration and compatibility
 * follow symlinks in hgwebdir collections
 * show branches in most of gitweb templates
 * add line anchors to annotate, changeset, diff and file views 
 * support web.baseurl in hgwebdir, overriding SCRIPT_NAME

Hooks:
 * standard hook to reject text files with CRLF in win32text extension
 * redirect stdout to stderr for ssh and http servers

Windows support:
 * "hg" script output set to binary mode for redirecting diff, export, annotate, etc.
 * also search for .hgrc if mercurial.ini cannot be found
 * major speedup of "clone --pull"