diff -r d2831a5d5947 -r 60bd4e707a7d mercurial/util_win32.py
--- a/mercurial/util_win32.py	Sun Dec 02 19:39:27 2007 +0100
+++ b/mercurial/util_win32.py	Tue Dec 04 23:10:13 2007 +0100
@@ -190,7 +190,7 @@
 def user_rcpath_win32():
     '''return os-specific hgrc search path to the user dir'''
     userdir = os.path.expanduser('~')
-    if userdir == '~':
+    if sys.getwindowsversion() != 2 and userdir == '~':
         # We are on win < nt: fetch the APPDATA directory location and use
         # the parent directory as the user home dir.
         appdir = shell.SHGetPathFromIDList(