diff -r 1107888a1ad1 -r 97f6d2a02c1f mercurial/util.py
--- a/mercurial/util.py	Thu May 27 22:50:04 2010 +0300
+++ b/mercurial/util.py	Fri May 28 17:28:34 2010 +0200
@@ -458,7 +458,7 @@
         for name, kind in osutil.listdir(src):
             srcname = os.path.join(src, name)
             dstname = os.path.join(dst, name)
-            copyfiles(srcname, dstname, hardlink)
+            hardlink = copyfiles(srcname, dstname, hardlink)
     else:
         if hardlink:
             try:
@@ -469,6 +469,8 @@
         else:
             shutil.copy(src, dst)
 
+    return hardlink
+
 class path_auditor(object):
     '''ensure that a filesystem path contains no banned components.
     the following properties of a path are checked: