diff -r 5dac0d04b838 -r 4a13ca2c21ce mercurial/subrepo.py
--- a/mercurial/subrepo.py	Wed Dec 08 13:12:12 2010 -0600
+++ b/mercurial/subrepo.py	Fri Dec 10 23:05:48 2010 +0100
@@ -333,6 +333,8 @@
 
             def addpathconfig(key, value):
                 if value:
+                    if not os.path.isabs(value):
+                        value = os.path.relpath(os.path.abspath(value), root)
                     fp.write('%s = %s\n' % (key, value))
                     self._repo.ui.setconfig('paths', key, value)