diff -r f3058dd05281 -r 0935ff767285 mercurial/dirstate.py
--- a/mercurial/dirstate.py	Fri Dec 31 17:09:38 2010 -0600
+++ b/mercurial/dirstate.py	Wed Jan 05 15:56:03 2011 +0100
@@ -505,7 +505,7 @@
         i, j = 0, 0
         while i < len(files) and j < len(subrepos):
             subpath = subrepos[j] + "/"
-            if not files[i].startswith(subpath):
+            if files[i] < subpath:
                 i += 1
                 continue
             while files and files[i].startswith(subpath):