diff -r 74f65f44a9aa -r 7c976bb039af mercurial/util_win32.py
--- a/mercurial/util_win32.py	Mon Dec 03 19:19:12 2007 +0100
+++ b/mercurial/util_win32.py	Tue Dec 04 23:28:10 2007 +0100
@@ -205,7 +205,7 @@
 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(